June 9, 2020 – New York State kicked off pre-marketing today for a $3.4 billion Revenue Anticipation Notes (RANs), issued via the Dormitory Authority of the State of New York (DASNY).

The transaction is slated to price on Thursday, June 11. Citi is serving as bookrunner.

According to sources familiar with the deal, initial price whisper for the 9-month note maturing in March 31, 2021 is set at 0.75%, representing a roughly +60 spread to 1-year MMD.

Dealers BuyMuni spoke with were confident the deal gets done at under 1%, despite historic challenges posed by COVID-19. In the State’s most recent revenue estimates, a $13.3 billion revenue shortfall was projected for fiscal year 2021, with a mammoth $61 billion decline expected through fiscal year 2024.

Some market commentators are of the view the financial picture is much less dire than what the state projected, noting that economies were re-opening and the stock market has now recovered to early 2020 levels.

In April, the state legislature approved $8 billion in bond issuance to help narrow the cash deficit.

The deficit notes are secured by the state’s personal income tax revenues, 50% of which will be pledged to bondholders.

Contact Karen Bigelow at KBigelow@buymuni.com.