The Port Authority of New York and New Jersey is expected to sell $595 million of bonds on Wednesday in two separate competitive offerings.
About $170 million of bonds will be taxable and are expected to finance general Port Authority purposes, according to spokesman Steve Coleman.
The other issue totals $425 million of tax-exempt bonds and includes $278 million of refunding bonds. The new money portion will finance capital expenditures at the authority's tunnels, bridges, and Port Authority Trans-Hudson facilities, Coleman said.
According to the preliminary official statements, current significant capital projects include rehabilitation of a runway and taxiways at the John F. Kennedy International Airport, modernization of the Goethals Bridge, and access infrastructure improvements at the Lincoln Tunnel.
The taxable bonds will mature in 2013 through 2022 and will not be subject to early redemption. The tax-exempt bonds will be subject to early redemption and have maturities ranging from 2013 to 2042.
As of Monday afternoon, ratings had not yet been assigned to the new bonds, but agencies assign double-A minus ratings on outstanding consolidated bond issues, citing authority operations as a critical transportation link in the region.
"The authority has a monopolistic position over an expansive, diverse portfolio of transportation and commerce related assets, including four metropolitan New York/New Jersey airports, an interstate transportation network (tunnels, bridges, terminals, and ferries), and seaports," Fitch Ratings analysts said in a September report.
Both Fitch and Standard & Poor's rate the authority's outstanding bonds at AA-minus, with stable outlooks.
Moody's Investors Service lowered its rating to Aa3 from Aa2 ahead of the authority's last sale of $2 billion of consolidated bonds in September.
The downgrade was due to the authority's increased financing needs of nearly $2 billion through 2016, expected growth in future needs, and on-going risks associated with the development of the World Trade Center, analysts said.
Despite the downgrade, the bonds received strong demand in September, pricing a day early with a 4.458% yield in 2062.
The new bonds will be secured by the authority's revenues, in addition to cash reserves from its general reserve fund and consolidated reserve fund.
Revenues include tolls and fares, rentals, flight fees, and parking fees. According to its proposed operating budget for 2013, which the authority released on Friday, gross operating revenues for 2013 are estimated at $4.2 billion. That amount is up 2.3% from its $4.1 billion in revenues in 2012.
The proposed budget for 2013 totals $2.57 billion in operating expenses — slightly higher than the $2.67 billion of expenses estimated for 2012. The authority's Board of Commissioners is scheduled to take action on the proposed budget at its meeting on Dec. 6.