Wall Street’s share of the state’s tax bond business

When New York State borrows against personal income tax payments, the banks that put together the bonds, known as underwriters, effectively collect a fee for the service. That fee is often shared with other firms dealing in the bonds, and firms do not have to disclose how they divide the total. But the “lead underwriter” is the financial institution in charge of each bond deal.

Below, the top 10 firms serving as lead underwriters on New York State’s personal income tax bonds between 2009 through 2011, and the fees paid by state authorities on their bonds.

Lead Underwriter Fee
CitiGroup $15,876,651.00
Goldman, Sachs & Co. $13,867,873.60
Merrill Lynch, Pierce, Fenner & Smith $13,106,885.23
Wells Fargo Bank $11,937,401.54
M.R. Beal & Company $8,988,879.09
RBC Capital Markets Corporation $5,059,089.86
J.P. Morgan Securities $3,942,217.00
Morgan Stanley & Co. $1,795,052.12
Siebert Brandford Shank & Co.. $1,507,214.54

Data & Table: Alexander Hotz
Source: New York World calculation based on 2009-2011 bond reports from New York State’s Dormitory Authority, Thruway Authority, Housing Finance Agency, Environmental Facilities Corporation and Empire State Development Corporation.

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