The New Jersey Transportation Trust Fund Authority issued $1.1 billion in bonds to refund outstanding bond issuances.
The authority issued the bonds in two series. It sold $425 million in Series 2023 A transportation system bonds and $693 million in Series 2023 AA program bonds.
The bonds received a rating of A2 from Moody’s Investors Service, A from Fitch Ratings, and A- from S&P Global Ratings. The Series 2023 A bonds mature between 2024 and 2042, with yields ranging from 3.71% to 4.51%. The Series 2023 AA bonds mature between 2024 and 2044, with yields between 3.43% and 4.59%.
The rating reflects “that the state has effectively used the fiscal momentum of recent years to accelerate progress on its long-term fiscal and liability challenges,” according to Fitch.
The issuance comes as New Jersey aims to rehabilitate its transportation infrastructure. The state has a number of mounting infrastructure challenges, including a growing number of bridges rated structurally deficient and roads that are in need of massive repairs. Driving on those roads costs each New Jersey driver $713 annually, according to the American Society of Civil Engineers, an industry group. The authority’s mission includes “planning, acquisition, engineering, construction, reconstruction, repair, and rehabilitation of the state’s transportation system,” according to its website.
The transportation system bonds will be backed by the revenue of the authority. The so-called program bonds are special obligations of the authority, secured by payments to the authority made by the state. However, those payments are subject to appropriations by New Jersey’s state legislature, which is not legally obligated to make such payments.
Jefferies LLC served as lead underwriter on both issuances, purchasing the Series 2023 A bonds for $435 million and the Series 2023 AA bonds for almost $726 million. The purchases reflected a net premium of $43 million.