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$1.5B Bonds To Finance Office, Subway Projects

NEW YORK CITY-The city will issue its first HYIC bonds to fund the extension of the No. 7 subway line. Office development in the area is expected to be fueled by the extension.

By Katie Hinderer | Updated on November 21, 2006

NEW YORK CITY-The development of Hudson Yards into a commercial and residential location has been a city project for several years now. Reaching the goal, and extending Manhattan’s very tight Midtown office market, will take a large step forward during the first week of December. The city is set to sell the Hudson Yards Infrastructure Corp. senior revenue bonds beginning on Dec. 4.

The proceeds from the bonds will be used to extend the No. 7 subway line west and south. The current line stops at the Times Square station at Seventh Avenue and 41st Street, but under current plans the line will run to 11th Avenue and 34th Street. Construction is slated to begin next summer but will most likely not be complete until 2013.

Fitch Ratings has assigned the bonds an A- rating, according to a release. The company bases its rating on “The historical strength of the midtown Manhattan real estate market, the expectation of the strong demand for commercial and residential development in the Hudson Yards area that will support the bonds, and, significantly, New York City’s obligation to pay interest on up to $3 billion of HYIC bonds when project revenues are insufficient for this purpose.”

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