The New Jersey Transportation Trust Fund Authority (NJTTFA) issued $1.25 billion in bonds to finance state aid to counties and municipalities for transportation projects.
The bonds mature between 2032 and 2050, yielding between 3.51% and 4.78%. They received a rating of A from Fitch Ratings, A2 from Moody’s Investors Service, A- from S&P Global Ratings, and A from Kroll Bond Rating Agency.
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,” Fitch analysts wrote. They added that “solid economic performance, matched by robust revenue growth, has helped New Jersey shrink its liabilities and build ending balances well in excess of historical experience.”
The bond proceeds will support road and public transit improvements in a state where the majority of roads have seen better days. According to the American Society of Civil Engineers (ASCE), an industry group, 57% of New Jersey roads are in poor or fair condition. Driving on roads in need of repair costs drivers in the state an average of $713 annually, according to ASCE.
The NJTTFA is taked with maintaining the state’s roadways, while NJ Transit, another state-owned corporation, principally operates New Jersey’s public transportation. The bonds are special obligations of the authority, secured by pledged payments from the state of New Jersey.
Wells Fargo Bank, NA, served as lead underwriter on the issuance, purchasing the bonds for $1.32 billion. The price reflected a premium of $69 million.