The New York Liberty Development Corp., which issues debt to help rebuild the World Trade Center, led the inaugural Bond Buyer 100 list of top bond issuers for 2011.
The NYLDC in 2011 sold eight issues totaling a combined par amount of $5.8 billion.
Developer Larry Silverstein attributed the sales — notably the $1.2 billion issuance in October to complete the 4 World Trade Center project — to momentum from the redevelopment in Lower Manhattan.
Four World Trade Center is one of two towers rising on the site of the Sept. 11, 2001, terrorist attacks.
“The investment community’s appetite for the Liberty bonds that were issued for 4 World Trade Center served as vote of confidence and also as recognition of the tremendous momentum that is building at the World Trade Center,” Silverstein said.
The October bond deal had been pulled twice, in December 2010 and April 2011, due to the tenuous state of the municipal market. But the board of the Port Authority of New York and New Jersey approved a financing plan in October, paving the way for the sale.
The authority owns the site for Tower 4, and has leased the building to Silverstein Properties Inc.
Goldman, Sachs & Co. was picked to be the primary book-runner.
According to Marvin Markus, a managing director in public-sector and infrastructure banking at Goldman Sachs, 4 World Trade involved a one-time structure that combined Port Authority support and a New York City lease.
“We’re pleased to be part of the transaction, given its importance to Lower Manhattan. We live across the street and making sure that it’s a viable, functioning project is important to us,” Markus said in an interview.
“These are very well-secured, highly rated bonds, and in the case of long-term bonds for 4 World Trade Center, there are a series of three long-term bonds that have relatively little amortization,” he said. “They’re tradable, well-known bonds of a high-grade nature.”
The bonds mature from 2031 to 2051.
New York Liberty Development, a unit of the state-controlled Empire State Development Corp., was established to enhance redevelopment at the site through the sale of Liberty bonds.
The momentum carried over into 2012, with Liberty Development selling $450 million of Liberty revenue refunding bonds, Series 2012, in mid-March.
The bond proceeds will refinance debt, pay closing costs, and return preferred-equity investment to Silverstein.
Silverstein’s namesake company, Silverstein Properties Inc., has developed, owned and managed more than 35 million square feet of commercial, residential and retail space, and now has about $10 billion worth of development activities in the pipeline, including a number of buildings within the World Trade Center site.
Fitch Ratings in a recent report cited Silverstein’s experience and stable tenancy as positives at the WTC site.
As of February, the property at 7 World Trade Center was 95.2% leased and 75.7% occupied. During 2011, the borrower executed two new leases for around 336,000 square feet with Wilmer Hale and MSCI Inc.
Finishing third on the Top 100 list, behind California, was the New York City Transitional Finance Authority, whose 10 deals totaled a combined $4.5 billion in par amount.
Deals for the TFA, which issues bonds for general capital purposes for the city, included a $650 million sale of new-money building aid revenue bonds in December.
Right behind the TFA, at No. 4, was the Dormitory Authority of the State of New York.
DASNY, founded in 1944 to finance and construct dormitories at state teachers’ colleges — hence its name — went to market often, selling $4.4 billion of debt through 28 issues.
“We’re a frequent issuer, compared with the others in the top five. Investors see that we’re in the market a lot. We’re often involved with large-denomination deals, or what I would call benchmark deals,” said DASNY president Paul Williams.
“And we haven’t had investor losses in more than 60 years. This enhances our ability to attract investors for our clients.”
Williams cited five DASNY deals in 2011 as most significant.
In January, it sold $131 million of New York University Hospitals Center revenue bonds to partially fund renovation of the emergency department, and construct a musculoskeletal institute.
The following month, the Dormitory Authority issued $300 million on behalf of Columbia University for construction of a science center at its Manhattanville campus.
DASNY in April issued $146 million of bonds to fund the construction of a 21-story building at the Lincoln Center campus at Fordham University — nine stories for law school academic use and a 12-story resident hall that will house 430 students.
In July, it sold $909 million of general-purpose personal income tax revenue bonds to finance State University of New York capital projects and grants under the Expanding Our Children’s Education and Learning program.
In September, the agency offered $392 million of North Shore-Long Island Jewish Obligated Group new and refunding revenue bonds.
The proceeds will be used to replace 115 beds at Zucker Hillside Hospital in Glen Oaks, N.Y., build an education and conference center at Staten Island University Hospital in Staten Island, and construct a parking facility at Huntington Hospital on Long Island.
“We’re in the market with a lot of different names,” Williams said. “One reason I like this position is that we’re all across the state, accomplishing things with projects that are really fabulous.”
Paul Burton writes for The Bond Buyer.