WASHINGTON Jan 2 Congressional lawmakers added
a provision into legislation on avoiding the U.S. "fiscal cliff"
that extends for two years issuance of Liberty Bonds, the debt
authorized after the Sept. 11, 2001, attacks to help rebuild New
York, according to a copy of the bill.
Liberty Bonds are unlike many sold in the $3.7 trillion
tax-exempt m unicipal bond market - they are issued by the New
York Liberty Development Corporation to make loans to companies
and they are solely secured by loan payments from those
companies. The corporation is an arm of the state-controlled
Empire State Development, which was created to help finance
rebuilding in lower Manhattan.
For example, $1.24 billion of revenue bonds sold in 2005
were used for a loan for building the headquarters of Goldman
Sachs. Those bonds are repaid with money Goldman puts
toward its loan. This allowed Goldman to borrow at tax-exempt
rates, which are often lower than corporate ones.
The bond program was set to expire at the end of 2012, but
the late-night deal on the combination of tax and spending
changes that had made up the "fiscal cliff" included an
extension through 2014.
Goldman was the lead manager on the last sale of the bonds,
$1.65 billion of new and refunding revenue debt, in July. JP
Morgan was the lead underwriter for the previous sale, in March,
of $450 million revenue refunding bonds.