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New York MTA Kicks Off First-Ever Payroll-Tax Bond Deal

  • Transit agency offers 30-year debt at initial yield of 1.84%
  • Bonds backed by payroll-tax receipts rather than farebox cash
MTA Subways during the Pandemic

Photographer: Dina Litovsky/Bloomberg Green

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New York’s Metropolitan Transportation Authority began marketing its first-ever bond sale backed by a payroll tax and lowered the initial yield on debt maturing in 30 years to 1.84%, according to preliminary pricing information.

The MTA, the operator of the nation’s largest public-transit system, is issuing the debt backed by that tax to provide extra security to investors after subway and bus ridership plunged after the pandemic. The preliminary yield is 28 basis points over the AAA benchmark.