DiNapoli Announces Award of New York LGAC Bonds
Comptroller Awards $250 Million of Series 2010A Tax-Exempt Subordinate Lien Refunding Bonds
New York State Comptroller Thomas P. DiNapoli today announced the award, through a competitive sale, of $250 million of New York Local Government Assistance Corporation (LGAC) Series 2010A Subordinate Lien Refunding Bonds to Citigroup Global Markets Inc. The true interest cost of the winning bid was 3.136022 percent.
Other bids were submitted by: Barclays, J.P. Morgan, Goldman Sachs, Wells Fargo, Morgan Stanley and Bank of America Merrill Lynch at true interest costs of 3.152531percent, 3.168270 percent, 3.205990 percent, 3.210374 percent, 3.239749 percent and 3.255559 percent, respectively. All bids were received via IPREO’s BiDCOMP/PARITY competitive bidding system, BiDCOMP.
The net proceeds of the Series 2010A Subordinate Lien Refunding Bonds will be used to call and redeem $277.4 million in previously issued senior lien variable rate bonds. The bonds will mature on each April 1 beginning on April 1, 2011 and ending on April 1, 2025. The bonds are expected to be delivered on May 27, 2010.
Refunding the variable rate bonds with fixed rate bonds allows LGAC to take advantage of the low interest rate environment and reduce its exposure to interest rate risk, liquidity renewal risk and support cost increases.
The 2010A Subordinate Lien Refunding Bonds will be general obligations of LGAC, payable from payments LGAC receives from the State. The State’s payments to the LGAC are derived from a portion of the revenues collected from certain sales and compensating use taxes imposed by the State on a statewide basis.
Under the Public Authorities Law, LGAC is required to enter into an agreement with the New York State Comptroller for the sale of all LGAC bonds and notes. DiNapoli serves as LGAC’s “Exclusive Agent” for these sales.
Additional information about the New York Local Government Assistance Corporation can be found at:http://www.osc.state.ny.us/pension/debtlgac.htm.