The New Jersey Economic Development Authority will issue $1.94 billion of refinancing debt Tuesday and Wednesday to switch variable-rate school facilities construction bonds into fixed-rate mode. The bonds are secured by the state’s appropriation pledge.
The transaction will help terminate swaps aligned with the floating-rate debt. Officials aim to reduce the notional amount of derivatives attached to school construction debt by $1.7 billion, still leaving them with $1.9 billion in swaps. That will help decrease the mark-to-market value of the NJEDA swap portfolio to negative $288 million from negative $584 million, according to Fitch Ratings.