4 days ago I published an entry to discuss how the MTA turned to former NYC Mayor Ed Koch in advertisements to help stimulate the sale of bonds to investors. 2 days after that, I wrote about the MTA’s plan to scale back on the bond sale due to the instability of the financial markets. However later that day the MTA managed to sell $550 million dollars worth of bonds at a yield of 6.75%. William Neuman of the New York Times has more in this report:
The Metropolitan Transportation Authority on Friday braved a turbulent credit market to sell $550 million of bonds to support its capital construction program. The bond issue included $85 million of bonds sold to individual investors, which the authority had sought to attract with radio ads recorded by Edward I. Koch, the former mayor.
The bond sale was the authority’s first since the credit markets froze in the midst of the global financial crisis.
But the borrowing costs were considerably higher than the authority has had to face in recent years. The authority’s 20-year bonds sold at a yield of 6.75 percent, which approximates the interest the authority must pay.
That is more than a full percentage point higher than similar bonds issued earlier in the year.
Click here for the complete report.
I am surprised they sold that much worth of bonds. While I’m sure they did not want to pay a higher yield, at least it did give them an infusion of money to help give them a little financial wiggle room.
xoxo Transit Blogger