N.Y. State Thruway Authority Offers $440M for Multi-Year Program

The New York State Thruway Authority on Tuesday will sell $440 million of tax-exempt debt in a negotiated transaction to reimburse the state for expenses related to its multi-year highway and bridge capital program.

A retail order period for the Series 2011 fixed-rate second general highway and bridge trust fund bonds is scheduled for Monday. They will mature from 2012 to 2031.

A Thruway Authority official said that while the par amount is now $409 million, it will be adjusted at pricing to provide net proceeds of $440 million. The transaction will involve no swaps. Delivery date is scheduled for June 23.

Citi is the lead manager. Harris Beach PLLC is bond counsel to the authority. William Estes is general counsel and Robinson & Cole LLP is counsel to the underwriters.

Fitch Ratings and Standard & Poor’s have each assigned AA ratings to the bonds. Fitch, which linked the rating to the authority’s similar general obligation bond rating, has assigned a positive outlook. First Southwest Co. is the financial adviser.

“Underlying the AA rating on the trust fund bonds is the strength of the state’s incentive to appropriate for debt service,” Fitch analysts wrote.

“New York’s economy is broad, with substantial wealth and resources, although the health of the state’s economy and finances is closely linked to the cyclical financial services industry. ... New York’s debt burden is above average but still in the moderate range, and pensions are well-funded.”

The bonds are special obligations of the authority payable from dedicated transportation revenues to the highway and bridge trust fund, subject to annual appropriation by the state Legislature.

The trust fund receives portions of the petroleum business tax (about 29% of projected fiscal 2012 dedicated revenues), motor vehicle fees (39%), the motor fuel tax (19%) and other transportation-related taxes and fees.

Later this month, the agency plans a negotiated sale to issue $880.6 million of fixed-rate tax-exempt bond authority notes, including $680.6 in short-term debt rollovers, through its Thruway capital ­program.

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Transportation industry New York
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