NEW YORK, June 11 A scarcity of new paper in the
U.S. municipal bond market helped New York City borrow more at
lower rates on Wednesday, in its first bond deal since Mayor
Bill de Blasio's multibillion-dollar accord with labor unions in
Critics said they expected investors to shy away from the
city's debt because of the new mayor's liberal, big-ticket
policies. But the city suffered no blowback in this sale, at
least in part because of technical market factors, including low
yields and tight supply.
New York increased the size of the deal to $1.02 billion
from a planned $850 million offering of general obligation
In the longest maturity, 2034, the city was able to borrow
at a yield of 3.87 percent - 30 basis points lower than it did
in March, when the same maturity sold with a 4.17 percent yield,
according to the Mayor's Office of Management and Budget.
Morgan Stanley was the senior manager on the negotiated
deal, which had a two-day retail order period beginning on
Monday resulting in about $203 million of retail orders.
The deal priced for institutional investors on Wednesday,
when the size of the offering was increased, the OMB said.
Some analysts sounded a note of alarm on the city's finances
and creditworthiness after de Blasio reached an agreement with
teachers, who had gone for years without a contract under former
Mayor Michael Bloomberg.
De Blasio's labor deal could cost the city close to $20
billion through 2021, not including healthcare savings, when
applied to all city workers. It has helped create budget gaps of
$2.2 billion to $3.2 billion from 2016 to 2018, according to the
(Reporting by Hilary Russ; Editing by Jonathan Oatis)