New York City finance officials said last week they will sell up to $120 million of taxable yen-denominated bonds to investors in Japan.

City officials have contemplated the move for several months.

Michael W. Geffrard, director of the city's Office of Public Finance, had said the city would likely issue about $100 million of yen-denominated securities to Japanese investors.

In a May 19 letter to Kichiro Takao, president of Nikko Securities Company International Inc., Barry Sullivan, deputy mayor for finance, and Darcy Bradbury, deputy comptroller for finance, said the city has authorized Nikko to begin marketing the proposal in Japan.

Nikko will act as the deal's senior managing underwriter. The city would issue the securities at the same time it does a general obligation offering, the letter says.

Nikko officials were unavailable for comment. The city sold dollar-denominated bonds through Nikko in March, and the investment bank said at the time that the high yield and strengthening credit quality of city taxable bonds appealed to many Japanese investors.

Sources say the city will likely issue the securities in September, but the proposed deal will need state legislative approval because the city is not authorized to issue bonds in a foreign currency. Without such approval, the city will issue the securities through a special purpose, not-for-profit corporation, the letter says.

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