MTA to Use Taxable Refunding Bonds to Defease Debt

The finance committee of New York's Metropolitan Transportation Authority on July 28 approved a motion to issue special obligation taxable refunding bonds that would fully pay defeased bonds at their early redemption rate and could save the authority $32 million.

According to MTA finance director Patrick McCoy, recent federal tax law guidance allows the MTA to exercise its retained early redemption rights on certain transit facilities and commuter facilities bonds previously defeased and escrowed to maturity.

"Subject to market conditions at the time of the issuance of the Series 2014 taxable refunding bonds, the total amount of excess proceeds is estimated to be applied to the operating and maintenance needs of the transit and commuter systems," McCoy and chief financial officer Robert Foran wrote in a memo to the board.

The full board was expected to vote on the measure later in the afternoon.

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Transportation industry New York
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