NYS Environmental Facilities Corp., 2015A

New York State Environmental Facilities Corporation
New York City Municipal Water Finance Authority Projects

Second Resolution Bonds, Series 2015A
Subordinated SRF Bonds

Siebert Brandford Shank generated $101.9 million of retail orders demonstrating investor demand for a high-quality NY credit

In June 2015, Siebert Brandford Shank served as book-running joint-senior manager for the New York State Environmental Facilities Corporation (EFC) which issued the Series 2015A bonds on behalf of NYC Municipal Water Finance Authority to finance and refinance clean water and drinking water projects.
On the first day of the retail order period, despite the slight negative tone in the market, SBS proposed a retail scale that was 1 to 2 bps through the underwriters’ price views consensus average. To attract additional retail interest, 3% and 4% coupons were structured in certain maturities. Given the City’s recent positive experiences in attracting significant interest from retail investors in the long-end of the curve, a 2045 term bond was also offered. Not-withstanding a seemingly quiet Monday in the secondary market, by 12:30 pm, the EFC transaction had gar-nered approximately $87.4 million in retail orders. By the end of the retail order period at 3:30 pm, there were a total of $146.4 million of retail orders.
The day of institutional pricing, the Treasury and municipal markets were mostly unchanged. Given that MMD increased the previous day, Siebert Brandford Shank presented a scale without any spread adjustments, changing yields only to reflect the changes in MMD. Our firm’s objective was to maintain attractive pricing levels in order to build a strong book of institutional orders in order to decrease spreads at re-pricing. At re-pricing, EFC and NYC Water requested to reduce yields by 1 bps in 2020-2031 and 2 bps in the 2035 maturity. Siebert Brandford Shank agreed to the changes even though the market tone was weak (at this point, the MMD read was for 1-3 bps increases in 2022 to 2045), and balances remained in the front-end of the curve. By the end of institutional order period, there were $86.2 million of priority orders from investors. At final pricing, Siebert Brandford Shank underwrote $17 million of bonds to maintain the transaction’s pricing integrity.