NYC GO 2016A,B

City of New York
$750,475,000
General Obligation Bonds, Fiscal 2016 Series A and B

Siebert Cisneros Shank structures and successfully sells $750 million GO Bond issuance for City of New York

The City of New York offered General Obligation Bonds, Fiscal 2016 Series A and B on July 28th and 29th, 2015, to retail investors and on July 30th the bonds were offered to institutional investors for which Siebert Cisneros Shank (as Siebert Brandford Shank) was selected to serve as Senior Manager.

At the beginning of the order period, our firm had suggested spreads at the consensus level in almost all maturities, with the exception of 2017-2018 where SCS was 1 bp tighter than the consensus and 2019-2021 where SCS was 1-2 bps wider. The City requested that we tighten spreads by 1-4 bps in maturities 2028 through 2034 of Series B to bring the yield in line with equivalent 5% coupons on an option adjusted yield basis. The City entered the market for retail orders very aggressively with some of the tightest spreads of any recent New York City General Obligation issuance.

On the second day of retail, MMD yields increased by 1-2 bps throughout the intermediate and long end of the curve. We adjusted the scale with MMD and made an additional 1-2 bp adjustment from 2020 through 2035.
our strategy was to utilize retail orders to build momentum prior to the institutional period to use as leverage for any future spread adjustments. In order to capture more orders after the FOMC release at 2 pm, SBS agreed to extend the retail order period from 4:00 pm to 4:30 pm.

While the 2029, 2030, and 2031 maturities experienced subscriptions over their pars, because of hesitation related to the Fed and the tightness of the scale, the majority of maturities ended the retail order period with significant balances. The second day generated approximately $40 million in additional orders, for a total of $146.86 million in retail orders.

While the institutional order period began somewhat slowly, institutional accounts eventually placed over $771 million in par amount of orders, which represents an oversubscription of 1.2x (excluding member non-retail orders).

After reviewing orders, yields were bumped 3 bps in 2022 and 1 bps between 2028 and 2031. As for 2019, which was only 0.3x subscribed, was cut 2 bps. While asking accounts to move into this maturity was explored, SBS expected and was fully prepared to underwrite the balance in 2019 as well as the balances in 2018, 2024, 2025, 2027, and 2032. Total balances were approximately $68 million