Siebert Cisneros Shank served the City of New York as senior manager on the City’s $915.2 million tax-exempt General Obligation refunding bonds the week of March 4, 2019.

The City also concurrently sold $78.4 million of taxable GO bonds via competitive bidding, a transaction which was structured by SCS in conjunction with the tax-exempt bonds.


The tax-exempt proceeds were used to current refund prior debt and the taxable proceeds were used to advance refund noncallable bonds, mainly for compliance with New York Local Finance Law.


The week prior to pricing, Moody’s upgraded the City’s rating from Aa2 to Aa1, reflecting the City’s continued strengthening and diversifying economy, and its reduced reliance on the financial services industry.


SCS provided an extensive structuring analysis prior to pricing. The goals were to create an efficient refunding structure—maximizing cash flow savings during the financial plan years through 2023, minimizing the use of structuring bonds while meeting all State and Federal tax law compliance requirements and the City’s annual savings objectives.

With the SLGS window expected to close before the scheduled pricing date and sizable short-dated escrow requirements, SCS worked with the City and its FAs to pre-subscribe for SLGS in order to minimize escrow costs and improve transaction efficiency and execution.

Market Conditions

The overall driving market force was the historically tight ratio environment in the front end of the curve where the majority of the bonds were structured.

The week prior to pricing saw volatility within a tight trading range, with the ratios between municipals and treasury bonds ending the week at their lowest levels in 2019. Strong demand from asset managers as well as continued strong inflows into mutual funds helped drive municipal yields lower throughout the market.

Retail Marketing Strategy

A considerable challenge for the transaction was the tightest ratio in years 2020 through 2025, where maturity sizes ranged between $84 million to $120 million. SCS utilized a combination of 5% and sub-5% couponing to break up the large maturity sizes and recommended and maintained an aggressive scale throughout the retail order period.

  • The retail scale was 1 basis point higher or lower in spread between years 1 to 11 relative to the consensus scale, and between 2 to 4 basis points lower in spread from 12-years on.
  • Retail investors place a total of $564.4 million in order during the two-day retail order period.
  • $383.2 million of retail orders came on day 1 and $179.4 million on day 2, which represents the highest amount of second-day retail order flow for the City since 2017.

Final Pricing Results

The City received $580.4 million of institutional priority orders, creating a total order book of just over $1.1 billion by the end of the institutional order period.

Strong institutional demand in the long end created over-subscription levels of approximately 2 to 3 times and allowed SCS to tighten spreads by up to 3 basis points to a +22 level for all 5% coupon maturities 11 years and longer. Despite a spread adjustment of 2 – 3 basis points in 2021 – 2024, certain balances remained in the front end of the curve given the large maturity sizes, and SCS agreed to underwrite $68.9 million of bonds in order to maintain competitive pricing for the City.

Overall, SCS saw participation from a total of 52 professional retail SMA managers and 37 institutional investors. The refunding issue generated $139.9 million in net PV savings, or 12.6% of refunded par.