Financing

The New York City Transitional Finance Authority

The TFA is a public authority of New York State created by the New York Transitional Finance Authority Act in 1997. The TFA was created to issue debt, primarily secured with the City’s personal income tax, to fund a portion of the capital program of the City. The TFA was originally authorized to issue up to $7.5 billion of bonds and notes. On September 13, 2001, the TFA was given statutory authority to borrow $2.5 billion to finance costs related to the September 11th terrorist attack on the City. Currently, TFA is permitted to have $13.5 billion of debt outstanding and any amounts over and above that level are subject to the City’s remaining debt incurring power under the State constitutional debt limit.

Since July 1, 2020, the TFA has issued approximately $3.2 billion in FTS bonds for capital purposes and $2.8 billion in refunding bonds. The dates and principal amounts are as follows:

The TFA refunding transactions completed to date in fiscal year 2021 generated approximately $627 million of debt service savings during the financial plan period.

Additionally, the TFA took steps to manage outstanding floating rate bonds by converting approximately $640 million of floating rate bonds to a fixed rate mode.

The TFA plans to issue TFA FTS bonds for capital purposes of approximately $3.2 billion, $5.5 billion, $5.1 billion, $5.4 billion, and $5.9 billion in years 2021 through 2025, respectively.

In April 2006, the State enacted legislation authorizing issuance by the TFA of an additional $9.4 billion of bonds (Building Aid Revenue Bonds, or BARBs) to be used to fund certain capital costs for the Department of Education. This legislation also provided for the assignment to TFA of State building aid that had previously been paid directly to the City. The TFA currently has approximately $8.4 billion of BARBs outstanding which fund a portion of the capital program of the Department of Education. While the financial plan does not currently reflect the issuance of BARBs for new money purposes, there may be BARB issuance for refunding purposes given market conditions, If TFA BARBs are not issued for new money purposes, the amounts previously intended to be issued through that program would be financed with City or TFA FTS bonds.

Since July 1, 2020, TFA has issued $200 million in BARBs for capital purposes.

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