June 6, 2006

New Jersey Water Infrastructure Trust Readies $107M Refunding

Posted 06/06/06
by Adam L. Cataldo
Reprinted from Bond Buyer Newspaper

The New Jersey Environmental Infrastructure Trust will sell a series of refundings today totaling at least $107 million.

"We are refunding four series of bonds: '96. '97, '99, and 2000," said Dennis Hart, the trust's executive director. "Three of them are advance refundings, and now the 1996 has tripped over into a current refunding."

Hart said that because of market conditions, more securities may be added, but that at least $107 million will be refunded. A savings of about 4% is projected, with a savings of as much as 7% on some of the bonds.

"By doing this, we apply that savings to all the [borrowers] who receive our loans, so we pass on the savings directly to our borrowers," Hart said.

The bonds will be sold competitively through i-Deal's Parity Internet bidding system. McCarter & English LLP is bond counsel, and Public Financial Management is the financial adviser.

Moody's Investors Service, Standard & Poor's, and Fitch Ratings all rate the trust triple-A.

The trust typically issues debt every October for its pool loan program. Those loans have helped finance about $500 million of environmental infrastructure projects.

Hart said the trust set its debt volume record in 2005.

"Last year, we did $125 million of our bonds, but then in November, we did a special, single-issue variable-rate bond of $107 million [for a specific project]," Hart said.

Since its establishment in 1985, the trust has made about $3 billion in loans. It has about $2 billion of debt outstanding. Hart said 104 municipal and authority-level borrowers take part in the trust's pool program.

According to information on its Web site, the New Jersey Environmental Infrastructure Trust provides low-cost financing for capital environmental infrastructure projects. Those projects are meant to protect water resources, ensure safe drinking water, and help with economic development.