The Port Authority of New York and New Jersey sold $1.09 billion in bonds to refund previous issuances and make general capital improvements.
The authority sold the bonds in two series. The 242nd series, consisting of $535.2 million, matures between 2024 and 2053, yielding between 3.71% and 4.69%. The 243rd series, consisting of $550.4 million, matures between 2024 and 2043, yielding between 3.07% and 4.06%. All of the bonds pay interest at 5%. They received a rating of Aa3 from Moody’s Investors Service, AA- from S&P Global Ratings, and AA- from Fitch Ratings.
The rating reflects the authority’s “solid credit profile, including a sound recovery from the pandemic across the key business segments of bridges and tunnels, aviation and port facilities,” according to Fitch.
The authority will spend the majority of the bond proceeds, about $830 million, on refunding bonds it previously issued. It will spend the remainder, about $250 million, on capital improvements.
The authority has increased its spending as it emerges from the COVID-19 pandemic, which decimated revenue. Aviation and vehicle traffic has since returned to prepandemic levels, with rail ridership still at around 60% of its 2019 level.
The Port Authority runs the three major airports servicing New York City, the PATH rail system, a joint seaport, and the many bridges and tunnels connecting New York and New Jersey. The bonds are direct and general obligations of the authority, backed by its full faith and credit.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for more than $1.16 billion. The price reflected a premium of about $50 million.