Port Authority of New York and New Jersey Sell $2B Early

Despite a recent downgrade, the Port Authority of New York and New Jersey sold $2 billion of taxable bonds a day early due to strong demand.

RBC Capital Markets priced the bonds on Thursday with a final spread of 165 basis points over the 30-year Treasury.

"The transaction attracted interest from a wide range of global investors with greatest concentration coming from insurance companies and managers," said Jaime Durando, managing director at RBC.

The bonds were sold at par to yield 4.458% in 2062.

Moody's Investors Service downgraded the authority's bonds on Monday to Aa3 from Aa2, citing increased financial needs, primarily for Word Trade Center development, which are expected to continue increasing. The agency assigned a stable outlook.

Standard & Poor's and Fitch Ratings both kept their AA-minus ratings on the bonds. Both assigned stable outlooks.

Proceeds from the sale will go toward the authority's multi-billion dollar redevelopment of the WTC site and also toward refunding outstanding bonds.

The bonds, which are subject to early redemption, are secured by the authority's revenues and cash reserves from its general reserve fund and consolidated bond reserve fund. Revenues include tolls, fares, rentals, and other fees.

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Transportation industry New York New Jersey
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