 TRENTON
- State Treasurer John E. McCormac announced today that two recent refundings
of outstanding debt issued for the Transportation Trust Fund Authority
(TTFA) have saved New Jersey taxpayers more than $88 million in debt service
costs.
"For
the last two and a half years, the McGreevey Administration has leveraged
favorable market and interest rate conditions to refinance old State
debt and eliminate approximately $211 million in debt service expenses
in the budget," said Treasurer McCormac. "Over the last two
weeks, we succeeded in restructuring and gaining lower interest rates
on $1.4 billion in TTFA debt."
The
Treasurer said the two refundings, authorized the Legislature's Joint
Budget Oversight Committee and transacted by Treasury's Office of Public
Finance, will yield another $88.4 million in debt service savings for
New Jersey taxpayers over the course of the current and next fiscal
years. The TTFA deals bring total savings from 14 refunding transactions
since January 2002 to approximately $300 million.
Treasurer
McCormac noted that the $849.8 million in 2004 Series B Bonds and $566.7
million in 2005 Series A Bonds will be issued at a combined yield of
3.68 percent. These bonds refunded approximately $1.46 billion of higher
cost debt that was originally issued by the TTFA as part of multiple
bond transactions during the middle and late 1990s.
In
addition to the TTFA, the Office of Public Finance, under the direction
of Director Ann Flynn and Deputy James Petrino, has refunded outstanding
State debt on behalf of such agencies as the Economic Development Authority,
the Sports and Exposition Authority, and the New Jersey Building Authority.
The
Office also successfully transacted interest rate "swaps"
last year, which locked in low financing rates on $3.25 billion in future
borrowing for New Jersey's $8.6 billion school construction program.
"This
administration carefully monitors market conditions and has made the
right timing decisions on its refinancings to secure significant debt
cost savings to the taxpayer," said Treasurer McCormac. "The
debt service savings make it possible to redirect financial resources
to programs and services in the budget that benefit all New Jersey citizens,"
he said. The Treasurer noted that the savings achieved with the TTFA
debt will be reinvested in transportation projects. The savings make
it possible to boost the percentage of pay-as-you-go funding for new
trust fund projects and decrease reliance on bond financing of TTF projects.
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