- New York's Metropolitan Transportation Authority began marketing its first ever bond sale backed by a payroll tax and reduced the initial yield on debt maturing in 30 years to 1.84, according to preliminary pricing information.
The MTA, the operator of the nation's largest public transportation system, is issuing the debt that is backed by this tax to provide extra security to investors after the pandemic broke out for subway and bus ridership. The preliminary yield is 29 basis points above the AAA benchmark.
Related story: N.Y. MTA Gives New Bondholders Haven From Subway Ridership Drops.
The$ 1.2 billion offer includes$ 995.6 million of taxable bonds and$ 248 million of preliminary debt, according to tax-exempt pricing. The MTA cut a 1.9% yield on the bond 2051 and offered it during repricing to a tentative 1.84% yield.
Because payroll tax is a more stable source of income, new bonds carry AA credit ratings from S& P Global Ratings and Fitch Ratings. That's six steps higher than S& P's BBB grade and five levels above Fitch's A rating on MTA Transportation Revenue Bonds, which are backed by fares and tolls.
The national stock options deal with payroll taxes, even though the MTA is set to receive a combined$ 14.5 billion of federal aid to cover lost revenue during the pandemic.
According to its website, the MTA owes$ 48.6 billion of outstanding debt to it. According to a report on the MTA by State Comptroller Thomas DiNapoli, principal and interest charges are projected to take up 23% of the agency's revenue in 2024, up from an average of 16% during the past decade.
For more articles like this, please visit bloomberg.com and visit us at bloomberg.com.
For the past 20 years, a client had a high demand for a particular type of video game, and it was even more so when it came to being able to play a live model on YouTube.