The City of New York is planning to issue $91.4 million of tax lien collateralized bonds, according to a presale report from Standard and Poor's.
The NYCTL 2013-A transaction is being underwritten by J.P. Morgan Securities.
The bonds are backed by solely first-lien tax liens imposed by the City of New York on certain properties due to unpaid property taxes, sewer rents, sewer surcharges, and/or water rents. First liens typically have priority over other claims, including mortgages, and are only subordinate to subsequent tax liens.
At the time of closing, none of the tax liens in the collateral pool will be attached to foreclosed or real estate owned properties, according to S&P.
The transaction features a single tranche of fixed-rate senior notes rated 'AAA' by S&P. It benefits from overcollateralization of 35.00% of the initial pool balance.
The city issued a similar deal last year, series 2012-A. The liens in the current deal are more seasoned, as measured by the oldest outstanding lien on a given property. And the collateral pool's weighted average combined lien-to-value (CLTV) ratio is 5.53%, which is higher than the 4.73% weighted average CLTV ratio for the collateral supporting the series 2012-A collateral pool, S&P noted.
Tower Capital Management and MTAG Services will service the notes.