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MTA Sells $800 Million in Bond Anticipation Notes

By Munichain News Desk

The Metropolitan Transportation Authority (MTA) issued $800 million in notes to finance public transit improvements.

The authority itself sold $500 million in federally taxable bond anticipation notes, and its bridges and tunnels division sold an additional $300 million in notes. The securities received a rating of F1+ from Fitch Ratings, K1+ from Kroll Bond Rating Agency and SP-1+ from S&P Global Ratings.

The short-term rating reflects “the long-term credit quality” of the authority’s bonds, Fitch analysts wrote.

The bond proceeds will fund transit and commuter system expenditures. The bonds issued by MTA Bridges and Tunnels will specifically fund projects in the MTA’s capital improvement program.

The MTA is planning several upgrades as it rolls out a congestion pricing program that is expected to increase revenue by $1 billion annually. But the program’s launch is currently being held up by legal disputes spearheaded by New Jersey Governor Phil Murphy, who says that congestion pricing unfairly penalizes his state. The Bond Buyer has reported that the MTA is now budgeting just $3 billion for capital projects this year, down from $12 billion before Murphy sued.

That means that some long-discussed MTA improvements, such as investment in electric buses and installation of elevators in more subway stations, could be delayed as well. 

For its part, the MTA expects to issue more than $1 billion in transportation revenue bonds this week. They will be secured by payroll taxes and refund previously issued securities. The bond anticipation notes are also payable by payroll taxes. 

J.P. Morgan Securities LLC and Jefferies LLC served as lead underwriters on the issuance. Public Resources Advisory Group, Inc and Sycamore Advisors, LLC acted as financial advisors.

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