During the week of September 26, 2011, Siebert Brandford Shank (“SBS”) served as senior manager on the City of New York (“City”) General Obligation (“GO”) transaction, Fiscal 2012 Series D-1 & D-2 bonds (new money) and Fiscal 1994 Series E-3 & Fiscal 2004 Series H-A bonds (remarketing).
This transaction represented the second GO transaction that Siebert Brandford Shank has senior-managed on behalf of the City, bringing the total par that Siebert Brandford Shank has senior managed for the NYC GO credit to approximately $1.35 billion.
The week of the bond sale was characterized by a highly turbulent week marked by historic interest rate lows after the Federal Reserve announced its “Operation Twist” program in the prior week to lower long-term interest rates; as a result, retail demand was highly subdued, while institutional investors remained largely sidelined.
Despite this difficult market environment, the City was able to realize significantly lower nominal yields compared to its most recent GO transaction in July 2011. A large part of the success of this transaction was due to the City’s restructuring flexibility given the ever-changing market environment. Due to the volatility of the tax-exempt and Treasury market, Siebert Brandford Shank worked with the City to find appropriate price adjustments based on the changes in the relationship between the MMD and Treasury yields in our extensive “investor reads”. As a result of these ongoing investor discussions, the City was able to successfully match investor price demands to complete the transaction.