The New Jersey Turnpike Authority yesterday nearly tripled the size of its revenue bond deal set for Monday to $1.75 billion from $650 million, with the transaction to potentially include $1.25 billion of taxable Build America Bonds.
This will be the first taxable bond deal for the authority.
Officials said they plan to sell $500 million of tax-exempt, fixed-rate bonds and $1.25 billion of BABs, up from an earlier deal size that included $400 million of traditional bonds and $250 million of BABs, according to Dennis Enright, principal at NW Financial, the turnpike’s financial adviser.
Enright said the authority is anticipating heavy investor demand, as this will be the NJTA’s first foray into the taxable market. He expects pension funds, one of the biggest buyers of taxable bonds, to help absorb the deal.
“It’s a new name for investors in the taxable market and they are always looking for new names to add to their portfolios to ease up on concentration,” Enright said.
Fitch Ratings rates the Series 2009E and Series 2009F bonds A with a stable outlook. Moody’s Investors Service rates the deal A3, with a stable outlook. Standard & Poor’s assigns its A rating to the credit with a positive outlook. The NJTA has roughly 4.8 billion of outstanding debt.
Morgan Stanley Monday will price the bonds and Enright said institutional pricing may begin that day. Officials originally planned on a one-day retail order period with institutional sales to follow on Tuesday. Wilentz, Goldman & Spitzer PA is bond counsel.