N.Y.C., Back in Derivatives Market, Faces Decisions on Swaps

McDonald, Michael
May 2003
Bond Buyer;5/16/2003, Vol. 344 Issue 31637, p5
Trade Publication
The article focuses on the strategy adopted by New York City with regard to municipal derivatives and different kinds of debts. The city has hired swap advisers including First Albany Corp. as the adviser on its Transitional Finance Authority debt. The issuers have been attracted by the opportunity to diversify their debt by using swaps to get exposure to variable rates or different forms of fixed rates and to lock in low fixed rates, often tied directly to the taxable bond market. New York's Metropolitan Transportation Authority has done 11 swap deals, altering 15% of its total debt to synthetic fixed-rate by selling variable-rate debt and altering the exposure to a fixed rate by entering into a long-term contracts with Wall Street firms. Since it re-entered the market, the city has done one swap on water debt and three swaps on GO debt for a total exposure of more than $1.4 billion.


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