The City of New York is prepping $90.9 million of bonds backed by first priority tax lien certificates on residential and commercial properties, according to a presale report published by Moody’s Investors Service.

The certificates are collateralized by first priority liens on properties located throughout the five boroughs of New York City, arising out of property taxes, tax and sewer charges, and other liens.

The deal, called NYCTL 2015-A, will issue $72 million of class A senior certificates that are provisionally rated ‘Aaa’ by Moody’s, and are set to mature in November 2028. 

Moody’s considers the collateral of NYCTL 2015-A to be stronger than the pool backing the city’s previous tax lien securitization, which closed in August 2014. The weighted averaged lien-to-value (LTV) ratio of the latest deal is 10.44%, compared with 2014-A’s LTV ratio of 11.51%. Furthermore, the LTV distribution of series 2015-A is more favorable, as it has a lower concentration of LTVs above 10% than the previous deal.

Although the geographic concentration of 2015-A is similar to that of 2014-A, the latest deal has an unfavorably higher concentration of vacant land at 8%, compared to 5.31% for 2014-A.

The bonds benefit from credit enhancement in the form of 21% of overcollateralization, and have liquidity support from Bank of New York Mellon.

Moody’s cites the historical performance of the City of New York as another strength of the deal; this is the twenty-first tax lien securitization it has sponsored since the program began in 1996.

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