|FOR IMMEDIATE RELEASE||
CONTACTS: Tom Vincz
|October 12, 2004||
STATE NETS $88 MILLION IN DEBT SERVICE SAVINGS
FROM REFUNDING OF TTFA DEBT
- 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
"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.