The New Jersey Turnpike Authority issued $500 million in bonds to finance capital improvement projects.
The bonds mature between 2043 and 2054, yielding between 3.58% and 4.3%. The securities received a rating of A1 from Moody’s Investors Service, AA- from S&P Global Ratings, and A+ from Fitch Ratings.
“The rating reflects Fitch’s expectations of stable operating performance and continued revenue growth from annual toll rate increases,” Fitch analysts wrote.
The bond proceeds will fund projects included in the turnpike authority’s capital improvement program, which calls for $5.9 billion in spending through 2028. Major projects in the plan include the conversion to all-electronic toll booths and the widening of the turnpike near Newark Bay.
The issuance follows a series of major hikes to New Jersey Turnpike tolls, increasing the revenue generated by the turnpike authority. In 2020, the authority approved a 36% hike, followed by a 3% annual hike in each of the past three years. Tolls generated $1.6 billion for the authority last fiscal year, compared to $1.2 billion in FY 2019.
The bonds are revenue obligations of the authority, payable by turnpike revenue.
J.P. Morgan Securities LLC served as lead underwriter on the issuance, purchasing the bonds for $533 million. The price reflected a premium of $33 million. NW Financial Group, LLC acted as financial advisor.