New Jersey Turnpike Authority preparing third bond sale this summer

Fri Aug 1, 2014 5:08pm EDT

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Aug 1 (Reuters) - The New Jersey Turnpike Authority will issue its third round of revenue bonds this summer as part of the $6.3 billion in sales of U.S. municipal bonds and notes next week, according to Thomson Reuters estimates.

New Jersey plans to sell $205.7 million of turnpike revenue bonds, series 2014 C. In May, the turnpike authority issued $1 billion of fixed-rate turnpike revenue bonds in series 2014 A, and in July, the authority issued $125 million of floating rate turnpike revenue bonds in series 2014 B.

The New Jersey Turnpike Authority operates the state's turnpike and Garden State Parkway. The authority is in the midst of a $7 billion capital improvement program in which toll revenue supports the bond issuances. Thus far, the capital improvement program is under-budget and ahead of schedule, according to information presented to investors.

Moody's Investor Service rated the bonds A3, citing an inelastic demand for the authority's toll roads despite large rate increases, the economic recession, and severe weather events such as Hurricane Sandy.

Negotiated sales of bonds and notes are expected to total more than $4.6 billion next week, with competitive offerings reaching $1.7 billion.

Also on the calendar are $500 million of general obligation bonds from the state of Connecticut and $575 million of revenue bonds from the Illinois Finance Authority for the University of Chicago.

One of the largest deals hailed from the Rhode Island Tobacco Settlement Financing Corporation, which plans to issue $593.7 million of asset-backed bonds in part to refund the corporation's old debt. (Reporting By Robin Respaut; editing by Gunna Dickson)

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