September 20, 2022

Proceeds from Social Bonds will fund more than 3,000 affordable housing units in New York City

Responds to growing investor demand for investments that advance socially responsible goals

NEW YORK – New York Mayor Eric Adams and New York City Comptroller Brad Lander today announced that the city will issue approximately $400 million in taxable general duty social bonds in October 2022. Proceeds from the sale of these bonds will support more than 3,000 affordable housing units in New York City and advance the goals of Mayor Adams’ plan, Housing Our Neighbours: A Blueprint for Housing and Homelessness, to provide New Yorkers with safe homes. , high quality and affordable they deserve.

This is the city’s first sale of social bonds, which are part of an emerging class of environmental, social and governance (ESG) bonds that support projects with positive social and environmental outcomes. S&P Global Ratings has issued an opinion that the bonds are aligned with the International Capital Market Association’s Social Bond Principles, which support projects that fund affordable housing and socio-economic advancement and empowerment. S&P’s opinion is one of the strongest they have issued yet for a social bond issue, awarding “advanced” ratings for use of proceeds and project selection and evaluation.

Social Bonds aim to broaden the appeal of city bonds and deepen the investor base by appealing to the strong and growing demand from investors seeking investment opportunities aimed at meeting specific social objectives. . As taxable bonds, they should also attract pension funds, corporate bond buyers and asset managers, who are not traditional buyers of municipal bonds. Proceeds from the sale of these social bonds will be dedicated solely to reimbursing the city’s spending on affordable housing projects, prioritizing New Yorkers with the greatest need.

“Building more affordable housing is essential to advancing the vision set out in our ‘Housing Our Neighbors’ plan,” said Mayor Adams. “This groundbreaking sale of the city’s first social bonds will allow us to tap into a growing source of investor demand to promote a stronger, more resilient city, while investing in projects that support the positive social and environmental changes we want.” see in the world. ”

“Increasing the supply of truly affordable housing is both a key priority for New York City and an attractive investment for socially responsible investors,” said lander controller. “As demand for ESG investment opportunities increases, New York City aims to connect with new investors interested in investing their capital in city programs that support more sustainable communities.”

In 2021, investors bought around $50 billion in new municipal ESG bonds, up 79% from the previous year. Since 2018, approximately $36 billion of municipal bonds designated as social bonds have been issued, with more than 68% earmarked for affordable housing.

This bond offering will fund projects currently under development under the Extremely Low and Low Income Accessibility Program (ELLA), Supportive Housing Loan Program (SHLP) and Apartment Program Housing Affordable Rental Housing for Seniors (SARA) from the New York City Department of Housing Preservation and Development. . The funded projects will provide approximately 2,452 homes under the ELLA program, 682 homes under the SHLP program and 153 homes under the SARA program. More than 70% of the units are for households earning 60% or less of the region’s median income ($72,060 for a family of three), and 909 of the houses will provide permanent housing for individuals and families who were previously homeless.

All funded projects are new construction and must meet the Corporate Green Communities Criteria (EGCC) or New York City’s EGCC overlay or pursue Leadership in Energy and Environmental Design (LEED) certification v4, gold or platinum. Subject to market conditions, pricing of the $400 million of taxable fixed rate bonds will take place on Tuesday, October 4, 2022, via a negotiated sale led by Citigroup and Morgan Stanley as co-managers.

Along with the taxable bonds, the city will sell $950 million of tax-exempt fixed rate bonds. Subject to market conditions, pricing of the tax-exempt fixed rate bonds will also take place on Tuesday, October 4, via a negotiated sale through a syndicate of underwriting led by lead manager Citigroup, with BofA Securities, JP Morgan Securities, Jefferies, Loop Capital Markets, Ramirez & Co., RBC Capital Markets, Siebert Williams Shank and Wells Fargo Securities as co-lead directors. Retail investors will have priority to place orders for the tax-exempt bonds during a one-day retail period beginning Monday, October 3, 2022.

Preliminary official statements of exempt and taxable fixed rate bonds are expected to be available by September 20, 2022 on MuniOS.com.

This is not an offer to sell or the solicitation of an offer to buy any Bonds. Bonds can only be purchased through a broker. Potential investors are encouraged to carefully read the preliminary official statement, which describes the obligations.

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