The New Jersey Economic Development Authority achieved strong demand during Wednesday’s $350 million school facilities construction bond sale to help generate millions in savings for the Garden State.
Steven M. Petrecca, associate deputy state treasurer, said the transaction led by BAML ended up 10 times oversubscribed with $32 million in net savings compared to spreads from New Jersey’s last two appropriation-backed bond deals. The deal
“It absolutely exceeded expectations,” said Petrecca. “The investing public made a statement yesterday.”
Petrecca said a big reason for the heavy interest in the new bonds was new legislation
“I think investors are recognizing from the lottery contribution that we are turning a corner,” said Petrecca, who was the Department of Treasury’s point person for the Lottery Enterprise Contribution Act. “People are recognizing that we are going to have better revenues and better budgeting.”
Underfunded pensions have driven New Jersey to the second lowest bond rating of the 50 U.S. states. The state’s debt is rated A3 by Moody’s Investors Service, A-minus by S&P Global Ratings and A by Fitch Ratings and Kroll Bond Rating Agency.
Wednesday’s blowout NJEDA deal capped a more than 30-year New Jersey career for Petrecca, who is retiring at the close of business Friday with his duties to be filled by David Moore, acting director at the New Jersey Office of Public Finance. Petrecca became associate deputy treasurer two years ago after working as assistant state treasurer from 2010 to 2015. He previously worked in various roles at the New Jersey Office of Management and Budget, New Jersey Office of Public Finance, the New Jersey Educational Facilities Authority and New Jersey Department of Transportation.
“This is a great way of going out,” he said. “I feel honored to have been in this position.”
