LOS ANGELES, CA — Investors demonstrated strong demand for the City’s $1.369 billion Tax and Revenue Anticipation Notes (TRAN) to pre-pay the City’s annual pension contributions and to alleviate short-term cash flow needs. It is expected that the prepayment will save the City approximately $35 million this year.
The notes were sold with a June 2015 maturity at a yield of 0.11%, the lowest interest rate achieved in the City’s history. Ramirez & Co. served as lead underwriter on the financing, with Stifel Nicolaus & Co. and Citi serving as co-managers. The City received orders from 16 investors, including three investors who had never previously participated in the City’s TRAN sale. One of the investors, Bel Air Investment Advisors, is based in the City of Los Angeles.
“Investors are recognizing our commitment to fiscal discipline, which is saving taxpayer dollars,” said Los Angeles Mayor Eric Garcetti. The three principal credit rating agencies gave the notes the highest short-term ratings available.The City Administrative Officer, Miguel A. Santana, met last week with major investors in California and across the East Coast to update them on the City’s financial and economic status. Santana’s message was, “Los Angeles is committed to fiscal sustainability.”