The New Jersey Transportation Trust Fund Authority Tuesday is expected to approve the sale of $600 million of tax-exempt revenue bonds that would price in early May.
The Series 2011 bonds will be the final borrowing for the TTFA under its current financing strategy. After this sale, the fund’s entire existing $895 million annual appropriation from the state will be needed to pay down debt-service costs on more than $12 billion of outstanding TTFA debt.
Senior manager JPMorgan will price $600 million of revenue bonds, with a tentative pricing date of May 5, according to the bank’s syndicate desk. McCarter & English LLP is bond counsel on the deal.
The bond proceeds will help finance road, bridge, and mass-transit infrastructure needs throughout the state. New Jersey’s 10.5-cent gasoline tax, 13.5-cent diesel tax, and 10.5-cent motor fuels tax secure the bonds.
Fitch Ratings and Standard & Poor’s rate the TTFA credit AA-minus and A-plus, respectively. Moody’s Investors Service rates it Aa3.
When it sold debt in October, the authority utilized the now-expired Build America Bond program to issue $1 billion of taxable, new-money debt. Officials also included $485.8 million of tax-exempt Series 2010D bonds that refunded outstanding TTFA debt.
The Series 2010D bonds priced with serial maturities from 2016 through 2024 yielding 2.25% with a 3% coupon for debt maturing in 2016 to a 3.97% yield with a 5% coupon for bonds maturing in 2024, according to the deal’s official statement.
To help the state finance transportation capital projects in fiscal 2012, Gov. Chris Christie last month released a plan to redirect to the TTFA fund $140 million of revenue that currently flows into the state’s general fund. That money will help finance $1.18 billion of TTFA borrowing next year.
The $140 million includes $65.8 million of sales tax receipts generated from new-vehicle sales, $52 million of motor fuel revenue, and $22.5 million of gas-tax receipts.
Along with the $1.18 billion of TTFA bonding, Christie’s proposal includes $76 million of pay-go funding that will come from New Jersey Turnpike Authority toll revenues. The Turnpike Authority manages the 148-mile tollway, which runs diagonally from the northeastern part of the state to its southwestern region, and the Garden State Parkway, which runs north-south along the eastern part of the state for 173 miles.
In addition, Christie wants the Port Authority of New York and New Jersey to direct $343 million of its funds in fiscal 2012 for transportation needs in New Jersey. The bi-state agency’s board would weigh in on the $343 million of proposed spending, as would New York Gov. Andrew Cuomo.
The fiscal 2012 capital plan is part of Christie’s $8 billion five-year transportation financing proposal that he unveiled in early January. It includes a total of $4.4 billion of borrowing through fiscal 2016.
