NYS Thruway Authority, Series 2011A

New York State Thruway Authority
$351,895,000
State Personal Income Tax Revenue Bonds (Transportation)
Series 2011A

This was the first-ever M/WBE senior-managed deal for New York State Thruway Authority

The Series 2011A Bonds were issued to reimburse municipalities and other project sponsors for qualifying capital expenditures for highway, bridge and multi-modal prog­rams throughout the State of New York. Upon appointment as senior manager, Siebert Brandford Shank began providing comprehensive market updates to the Authority and the New York State Division of Budget (“DOB”) on a weekly basis, including information on recent comparable pricing results, MMD and Treasury yield movements, economic indicators and releases, upcoming negotiated and competitive financings, and summaries of secondary market activity for the Authority’s PIT and aggregate New York State PIT bonds to keep the Authority abreast of market trends and developments.

Given the continued rally in the tax-exempt market and the fact that MMD yields remained near historical lows, we actively ran scenarios of refunding savings for the Authority. Although the Authority decided not to pursue a refunding as a result of the large negative arbitrage, we provided various structuring scenarios that would still allow the Authority to optimize its borrowing efficiencies.

We also assisted in the tax analysis of the structuring alternatives available given different potential project and average life mixes—particularly complex for this financing because the mix of projects and average lives was expected to change based on incentives provided for different project types with different average lives.

The retail order period opened with approximately $199.410 million bonds being offered. To provide optimal incentives for retail investors, we recommended the Authority differentiate between “mom and pop retail” and “professional retail” buyers. Under the recommended priority of orders, New York and national “mom and pop” retail investors would be given priority over “professional retail” buyers, whose orders would be entered as “net designated professional retail”.

Approximately $138.050 million in orders were received during the retail order period, of which 78.6% were generated by Siebert Brandford Shank. The following day, the institutional order period began with approximately $234.275 million bonds offered, and by 11:00 AM, all maturities were oversubscribed. The Authority received approximately $643.445 million institutional orders, of which 50.6% were generated by our firm.

Due to some of the lowest historical tax-exempt borrowing rates in the market, coupled with a well-timed and strong marketing effort, the Authority achieved highly aggressive pricing levels, securing some of the lowest yields ever achieved on a Thruway PIT financing. The all-in TIC achieved was 2.899%.