New York Mayor Eric Adams was indicted on federal bribery, campaign finance and conspiracy charges, the U.S. Attorney’s Office announcing the deal quoted Adams alongside city Comptroller Brad Lander, who is campaigning to unseat Adams in the 2025 election and on Thursday called for the mayor to resign.

The mayor’s OMB and the comptroller’s office share the responsibility for issuing city bonds.

The deal is also taxable, so its market lies beyond the traditional market for city tax-exempts, to different institutional, out-of-state and international investors who are reading dramatic headlines in a story with worldwide reach. 

BofA Securities will run the books and Blaylock Van is joint lead manager, according to the presentation; BofA declined to comment and Blaylock Van did not respond as of publication time. 

The indictment landed with another city deal in the period between pricing and closing.

The New York City Municipal Water Finance Authority priced $887 million of bonds and $102 million of refunding bonds this week in a deal scheduled to close Wednesday. 

New York City is rated Aa2 by Moody’s Investors Service, AA by Fitch Ratings and S&P Global Ratings, and AA-plus by Kroll Bond Rating Agency. The city has $40.9 billion of GO debt outstanding, according J.P. Morgan strategists, led by Peter DeGroot. 

“The impact of this development on the city’s credit, if any, is unclear at this time,” J.P. Morgan’s strategists wrote. “However, we do note that S&P’s local government methodology states it would consider a downward adjustment to its management assessment in the event of ‘political gridlock or ongoing turnover in essential positions adversely affecting operations’ and/or ‘presence of unusual financial or legal challenges, such as fraud or other criminal activity.'” 

New York Gov. Kathy Hochul has the authority to remove the mayor, according to The City, an online news publication that has extensively covered the investigations that circled Adams until Thursday’s indictment. The city charter also provides for an “inability committee” of city officials that can remove a mayor, The City reported.

If Adams resigns or is removed, the city’s elected public advocate, Jumaane Williams, would step in as mayor until a special election is held.

“Mayor Adams, like all New Yorkers, deserves due process, the presumption of innocence, and his day in court. However, it is clear that defending himself against serious federal charges will require a significant amount of the time and attention needed to govern this great city,” Lander said in a statement Wednesday night. 

“The longer the situation festers, the worse it will be,” Hallacy said. “If it comes to a head in some kind of resolution faster, then I think it’ll be less of an issue. If it drags on, it becomes more of an issue.”

Block trading of New York City GOs in the secondary market Thursday did not show any penalties. Some were trading at lower levels than recent trading.

City GOs with a 5% coupon maturing in 2025 traded at 2.75% versus 2.80% Wednesday. New York City Transitional Finance Authority future tax secured bonds with a 5% coupon maturing in 2026 traded in blocks at 2.36% versus 2.40%-2.42% Tuesday and 2.52%-2.48% original yields on Sept. 12. New York City GOs with a 5% coupon maturing in 2036 traded at 3.00%-3.01% and GOs with a 5% coupon maturing in 2038 traded at 3.15% versus 3.13%-3.11% on Sept. 12.