DALLAS - Louisiana Friday clarified that it is not considering suing counterparties to a forward floating-to-fixed interest rate swap agreement on $485 million of gasoline and fuel tax revenue bonds for the state's $5.2 billion Transportation Infrastructure Model for Economic Development highway program.
William Ankner, secretary of the Louisiana Department of Transportation and Development, said Friday he did not intend to put forth a lawsuit as an option during his testimony earlier in the week before a special state Senate committee looking into the program's funding.
"It was inappropriate of me to suggest that litigation is an option in dealing with the TIMED swap counterparties," he said. "My comment was made out of frustration and does not represent the views of the administration."
Angèle Davis, commissioner of the Department of Administration and chief financial officer for Gov. Bobby Jindal, said the state is working with the counterparties to resolve the situation. A number of options are being considered to secure funding to complete the projects in the TIMED program, she said, but a lawsuit is not one of them.
"The state in 2006 entered into a forward-purchase delivery contract to issue $485 million of TIMED bonds, which now need to be issued in 2009," Davis said. "Because of market conditions, the termination of the swap now is very expensive.
"Our options have included negotiations with the counterparties to the contract. The options explored by the state have not included suing any of the swap counterparties," she said. "On the contrary, we look forward to continued cooperation with them in reaching a satisfactory conclusion to funding the TIMED program."
