Bloomberg and Bear, Stearns ink $650m school bond sale.
Under legislation passed by the New York State Legislature and signed by Governor George E. Pataki in April, the New York City Transitional Finance Authority (TFA) was authorized to finance up to $4.7 billion in bonds, backed by State funds. This week's sale of TFA Building Aid Revenue Bonds is the first under this innovative structure.
The proceeds of the bond sale will be used to pay for the construction of 66,000 classroom seats and the renovation of school facilities as laid out in the DOE Capital Plan. Combined with already created seats from 2003 to 2005, the Administration will have provided nearly 106,000 classroom seats across the City, alleviating pockets of overcrowding and reducing class size.
Bear, Stearns & Co. served as the book-running senior managing underwriter on the bond sale.
"The sale of today's bonds marks a victory for schoolchildren across New York City," said Mayor Bloomberg.
The bond sale transaction caps one of the City's most significant victories in the last legislative session in Albany, securing state capital construction funds for New York City's schoolchildren. In April, Governor Pataki announced that the State would provide its share of New York City's $13.1 billion School Capital Construction Plan.
Governor Pataki signed the legislation providing $1.8 billion in aid and authorizing an additional $4.7 billion in financing through the New York City Transitional Finance Authority. Yesterday, the Dormitory Authority of the State of New York issued bonds to provide $790 million of the $1.8 billion in grants to the City. Today, an additional influx of $650 million from the bond sale will added to funding for the DOE Capital Plan.
The combined State and City school construction financing for New York City will be used for the modernization and expansion of City schools as laid out in the Department of Education's Five-Year Capital Construction Plan which was announced in November 2003.
The capital plan calls for the construction of a total of 107 new school buildings with 66,000 school seats. The plan includes more than $4 billion for existing facilities, including exterior and interior building upgrades, mandated programs and other necessary repairs.