New Jersey postponed until May 1 its $350 million general-obligation sale, the first such new- money borrowing since 2009, to space out its bond deals.
Officials delayed the borrowing by a week, said William Quinn, spokesman for Treasurer Andrew Sidamon-Eristoff. The New Jersey Transportation Trust Fund Authority sold $878 million of revenue debt last week and the New Jersey Health Care Facilities Financing Authority issued $234 million the week before, data compiled by Bloomberg show.
“We wanted to give the market a little time to digest our bonds from earlier,” Quinn said. “We thought that next week looks like a better time.”
New Jersey, which Standard & Poor’s rates AA-, three steps below top-graded municipals, has had a negative outlook from the company since September because of concerns about Governor Chris Christie’s budget forecasts.
The state may miss revenue targets by as much as $302 million in the fiscal year ending June 30 and $335 million next fiscal year, David Rosen of the nonpartisan Office of Legislative Services told lawmakers April 4.
If S&P were to lower New Jersey’s rating, it would join California and Illinois as states graded four to six levels below top-rated muni debt. All three major credit-rating companies have downgraded New Jersey by one level since Christie took office in January 2010.
The general-obligation sale will price competitively. Proceeds will help finance capital projects, according to bond documents. The state’s last new-money general-obligation borrowing was a $205 million sale that priced December 2009, Bloomberg data show. New Jersey refinanced general-obligation debt in 2010.
The $350 million sale pushed to next week will include debt maturing from 2014 through 2033, bond documents show. Yields on an index of 20-year general-obligation debt sold by New Jersey and its localities were 0.24 percentage point above benchmark municipals with comparable maturities, near the 0.25 percentage- point yield difference Feb. 20, the widest spread in 16 months, Bloomberg data show.
Moody’s Investors Service rates the general-obligation sale Aa3, comparable to S&P. Fitch Ratings has a similar grade.
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