May 24, 2012
DiNapoli Announces New Local Government Assistance Corporation Bonds Awarded
Series 2012A Tax-Exempt New York Local Government Assistance Corporation Subordinate Lien Refunding Bonds: $86,845,000 Awarded
State Comptroller Thomas P. DiNapoli today announced the award, through a competitive sale, of $86.845 million of New York Local Government Assistance Corporation (“LGAC”) Series 2012A Subordinate Lien Refunding Bonds to Goldman, Sachs & Co. The true interest cost of the winning bid was 1.941636 percent.
Other bids were submitted by: Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Wells Fargo Bank, National Association, RBC Capital Markets, Barclays Capital Inc., Jefferies & Company, Inc., Southwest Securities, Inc., Morgan Stanley & Co, LLC, US Bancorp Investments, Inc. and Bank of America Merrill Lynch at true interest costs of 1.979678 percent, 1.985777 percent, 1.999763 percent, 2.032052 percent, 2.061080 percent, 2.061378 percent, 2.068096 percent, 2.107389 percent, 2.109538 percent and 2.128754 percent, respectively. All bids were received via IPREO’s BiDCOMP/PARITY competitive bidding system, BiDCOMP.
The net proceeds of the Series 2012A Subordinate Lien Refunding Bonds, in addition to other funds, will be used to redeem $125.9 million in previously issued senior lien variable interest rate bonds. The bonds will mature on each April 1 beginning in 2013 and ending in 2025. The bonds are expected to be delivered on June 1.
Refunding the variable rate bonds with fixed rate bonds allows LGAC to take advantage of the low interest rate environment, demand for highly rated municipal debt and reduce its exposure to interest rate risk, liquidity renewal risk and support cost increases.
The 2012A 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 New York 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. Comptroller 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.