October 1, 2007

Environmental Trust's $131 Million Bond Sale to Refinance 154 Water Infrastructure Loans

New Jersey Local Governments to Save Nearly $35M Through Refinancing Move

TRENTON - New Jersey Environmental Infrastructure Trust Chairman Robert A. Briant, Sr. today announced the sale of more than $131 million in refunding bonds to refinance 154 environmental protection projects. Municipal, county, utilities authorities and private water utilities will save nearly $35 million in finance charges on their infrastructure loans.

"This sale marks the 12th time the Trust has sold bonds to refinance infrastructure projects in New Jersey ," Chairman Briant said. "With this sale, 104 borrowers will realize a substantial savings that will help keep costs down for taxpayers and ratepayers. Our low-interest loans have funded 595 projects in New Jersey , totaling nearly $4 billion. These projects provide new or upgraded drinking water and wastewater treatment and conveyance pipes, open space preservation, stormwater controls and brownfield clean ups."

Moody's Investors Service, Standard & Poor's, and Fitch Ratings have each awarded these bonds their highest possible rating.

The sale was completed on September 12 in four series:

. Series 2007A - $51.94 million: Interest Rate - 3.88% Present Value Savings 4.24%

. Series 2007B - $37.44 million: Interest Rate - 3.91% Present Value Savings 4.71%

. Series 2007C - $38.83 million: Interest Rate - 3.97% Present Value Savings 4.35%

. Series 2007D - $2.865 million: Interest Rate - 4.10% Present Value Savings 5.43%

"Over the past 20 years, the Trust has saved municipalities more than $91 million in refinanced loans," said executive director Dennis Hart. "We are constantly monitoring market conditions to assess when the time is right to refinance past loans. In line with Governor Corzine's efforts to reduce local government costs, the NJEIT returns bond refunding savings to its borrowers."

The Financing Program's loans, which are 75 and 50 percent below market rates, provide substantial cost savings to municipalities and utility and sewerage authorities. To date, these loans have saved New Jersey taxpayers and ratepayers more than $1.8 billion in financing costs.

Created in August 1986, the New Jersey Environmental Infrastructure Trust is an independent state authority and the first program of its kind in the country. Working in partnership with the Department of Environmental Protection, the program combines interest-free loans from state revolving funds with market-rate loans from the sale of AAA-rated Trust bonds. This provides borrowers with a loan that is half the prevailing market rate. Projects that promote smart growth are eligible for loans that are one quarter of the market rate. Proceeds from last year's bond sale were combined with zero-percent state revolving funds to provide smart growth project loans at 1.05 percent and traditional project loans at 2.10 percent.

The Trust is preparing a 2007 Pooled Bond sale to take place on October 17, 2007. The proceeds from that sale will help finance environmental projects worth more than $525 million - the largest issue in the program's history. Over the past three years, the Trust and its partner the NJDEP, have financed over $1.5 billion in environmental infrastructure projects.

CLICK HERE to view a list of municipalities that will benefit from the refunding (Adobe PDF document). The table includes project type, original loan amount and loan savings.