Officials Monday pulled a $900 million Liberty bond deal set to price Wednesday, citing market conditions.
The proceeds from the Series 2011A Liberty revenue bonds would help finance the construction of Tower 4 at the World Trade Center.
New York Liberty Development Corp., a subsidiary of the Empire State Development Corp., is trying to sell the bonds on behalf of Silverstein Properties Inc., developer of Tower 4 and other buildings at the site.
It is the second time that the deal has been postponed due to the tenuous state of the municipal market.
The Port Authority of New York and New Jersey owns the land and the Tower 4 facility. The bi-state agency has leased the building to Silverstein Properties and will also rent out 600,766 square feet of office space. Tower 4 will have 1.8 million of gross square feet of office space once construction is completed in December 2013.
“Silverstein Properties and the Port Authority anticipate selling the Tower 4 Liberty bonds when conditions in the financial markets improve,” the two organizations said in a joint statement. “In the meantime, we continue to work together on the tremendous and visible progress at the World Trade Center site. The 9/11 Memorial remains on track to open as planned on the 10th anniversary, and 1 World Trade Center and 4 World Trade Center remain on schedule to be completed in 2013.”
The Liberty Development Corp. also plans to sell $375 million of floating-rate bonds, which is set to price before the closing of the fixed-rate bonds. Goldman Sachs & Co., the deal’s underwriter, and Larry Silverstein, president and chief executive officer of Silverstein Properties, last week said a mixture of fixed-rate and variable-rate debt would offer a total all-in cost in the 5% range.
The transaction had been on hold since December, when officials delayed what was then an all-fixed rate deal as interest rates rose.
Goldman Sachs declined to comment on this week’s unfavorable market conditions.
“We decline to provide any further detail,” spokesman Michael Duvally said.
The $1.28 billion of debt will help refund bonds sold in 2009. Those bond proceeds currently sit in escrow and Silverstein needs to access the funds to help finance Tower 4’s construction.
Congress created the Liberty bond program after the terrorist attacks of Sept. 11, 2001, to help finance redevelopment of the World Trade Center site and lower Manhattan. The program expired at the end of 2009.
