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  • New Jersey Turnpike Authority

    $1,528,990,000 Turnpike Revenue Bonds and $900,000,000 Forward Starting Swaps
    Northeast “Deal of the Year” – The Bond Buyer Newspaper

    NW Financial assisted the New Jersey Turnpike Authority (“NJTA”) in successfully completing the largest transportation financing in State history.  The proceeds were utilized to complete the consolidation of the Turnpike with the Garden State Parkway, fix the EZ-Pass system, restructure debt, and fund capital projects.  This transaction consisted of fourteen series of bonds issued in taxable fixed mode, tax-exempt fixed mode, auction rate mode and variable demand bond mode.  The deal received The Bond Buyer “Northeast Deal of the Year” award.

    As a part of the overall consolidation financing with the New Jersey Highway Authority, NW Financial evaluated and assisted with two forward starting swaps with three providers having a total dollar value of $900 million.  This transaction secured fixed rates in excess of 75 basis points lower than the cash market for the NJTA’s fixed rate bonds.

    Faced with a complex mandate to acquire the Garden State Parkway from the New Jersey Highway Authority to create consolidation savings and at the same time restructure over $300 million in third party debt to fix the EZPass system, the New Jersey Turnpike Authority undertook one of the most challenging transactions ever in the municipal market.  NW Financial, as financial advisor, assisted the Authority in both evaluating the structure options available to the Authority and ultimately implementing the many different options that were determined to be the most economically advantageous.

    This very challenging transaction was not without its difficulties.  NW Financial was charged with the coordination of all working group parties, including numerous bond counsels, trustees, government officials, and market participants.  As Financial Advisor, NW Financial created numerous spread sheet analyses describing the many alternatives and the varying effects each had on the transaction.  The firm generated monthly reports to the Authority keeping the officials up to date on the transaction’s progress.  NW Financial also led the team’s discussions and negotiations with potential bond insurance companies and most importantly the Rating’s Agencies.  Using the firm’s marketing, analytical and quantitative abilities in the financial marketplace, NW Financial performed comprehensive analyses evaluating such variables as: relative long/short term costs/benefits of alternatives, fixed versus variable rate financing, insured versus uninsured financing, short term versus long term financing, interstate sensitivities, arbitrage impacts, reinvestment optimization strategies, and the impact of tax law restrictions.  NW Financial was able to use its broad market communications, i.e. rating agencies, bond insurers, institutional and retail bond funds, regional and national bond counsels, and tax counsels, to create a coordinated, planned strategy designed to encourage maximum participation by investors.  NW Financial ultimately led the financial negotiations in a series of transactions that included: Forward Starting Swaps, Variable rate demand bonds, Auction rate bonds, Fixed rate tax-exempt bonds and Fixed rate taxable bonds.  The issuance resulted in 14 separate series of bonds and 6 separate swap agreements.

    When the financing was complete the client achieved cost of funds of less than 4% on the entire $2.4 Billion in financing and was able to absorb the debt service into its expenses without any toll increase.  The transaction also replenished the NJTA’s reserve funds to meet bond covenants.  NW Financial provided particular value added assistance in monitoring the pattern of debt service and in negotiating the transaction fees and interest rates.