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NYC: retail wants $6 mln more bonds than city sells
NEW YORK (Reuters) - New York City on Monday said retail investors placed orders for $6 million more debt than the $300 million it expected to sell, which means there might be no debt left for institutional players.
But institutions, from insurance companies to arbitragers to mutual funds, might not be disappointed because it has been several months since they have displayed much desire for tax-exempt debt.
As a result, New York City is one of a shrinking number of issuers of municipal securities that has not had problems selling its bonds as the global credit crunch keeps claiming victims. California, for example, has asked the U.S. government for help more than once, while the New York-New Jersey Port Authority last week had to cancel a taxable debt sale.
New York City is rated three notches below the highest possible "AAA" rating at "Aa3" by Moody's(nyse: MCO - news- people ) Investors Service, which means it does not offer the safety that many investors now crave. However, some of the city's advantages include many wealthy individuals who prize tax-free income because they pay state and city income taxes.
A city spokesman was not available to say whether it will now sell more bonds, to accommodate any institutional customers, or when it last presold an entire bond sale.
States, cities, hospitals, turnpikes and the like often judge a presale period a success if individuals order just 15 percent to 20 percent of the debt.
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