NYC agency says to sell tobacco bonds on Nov. 3
The New York City agency created to sell bonds backed by revenues from a multi-state agreement with the tobacco industry said on Wednesday it will sell $700 million of tax-exempt debt on Nov. 3.
The agency had previously said it would sell its initial transaction in mid- to late November. The move means New York City will likely be the first municipality to issue the new type of security, which is backed by payments settling litigation between tobacco companies and 46 states.
Nassau County, N.Y., is expected to sell a tobacco bond deal around the week of Nov. 8.
New York City's Tobacco Settlement Asset Securitization Corp., a local development corporation, also said on Wednesday it would hold a pre-sale period for retail investors beginning on Nov. 1.
The corporation is a separate entity from the city, and the debt is not considered an obligation of the city. That means neither the revenues or the taxing power of the city will back the bonds.
The bond proceeds will be used to fund the city's ongoing capital program.
Salomon Smith Barney will be the book-running senior manager on the bond sale. Bear, Stearns & Co. and J.P. Morgan & Co. will serve as co-senior managers.