The New Jersey Transportation Trust Fund Authority on Thursday approved a $1.4 billion new-money and refinancing deal that will most likely include taxable Build America Bonds.

Officials anticipate issuing the debt in late September or October. Preliminary plans include $990 million of new-money bonds to help finance road, bridge, and mass transit projects, and $439 million of refunding debt, according to TTFA executive director Gary Brune. The authority will probably offer the new-money bonds as BABs rather than tax-exempts, depending upon market conditions.

With BABs, issuers receive a 35% subsidy on interest costs from the federal government. Barclays Capital is the senior manager on the deal.

The new-money bonds are set to mature from 2023 to 2027, though that structure could change, Brune said. He also serves as the chief financial officer in the state’s Department of Transportation.

The $439 million refinancing will help the authority create borrowing capacity in fiscal 2011, which began July 1. The refinancing will include restructuring debt by pushing certain debt-service costs out to future years, with the generation of present-value savings by refinancing other bonds. By law, New Jersey debt restructurings must include refinancing to produce present-value savings.

Gov. Chris Christie’s administration anticipates presenting the $1.4 billion TTFA transaction to the Joint Budget Oversight Committee this month, though a firm date has not been set. Any state debt restructurings must go before the committee for review.

This is the final year that the TTFA has bonding capacity. Beginning July 1, 2011, the start of fiscal 2012, principal and interest payments will take up the authority’s entire $895 million annual state appropriation. That figure comes from a dedicated portion of New Jersey’s gas and diesel taxes, and a portion of sales tax revenue from new-vehicle sales.

The TTFA has about $11 billion of outstanding debt. Moody’s Investors Service rates the credit Aa3. Standard & Poor’s and Fitch Ratings rate it AA-minus and A-plus, respectively.

The authority issues debt every year to help finance Department of Transportation and New Jersey Transit infrastructure needs.

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