For Immediate Release: June 27, 2012
GOVERNOR CUOMO ANNOUNCES $1.1 BILLION RAISED BY THRUWAY AUTHORITY IN BOND SALE
Governor Andrew M. Cuomo today announced that the New York State Thruway Authority has completed a highly successful sale of long-term bonds, raising $1.1 billion to help create a solid foundation for the Authority and ensure it can move forward with capital projects across the state, including the Tappan Zee Bridge.
"The Thruway Authority has taken important steps to save costs and put in place a financially secure capital plan that will allow vital repair projects to be undertaken across New York State," Governor Cuomo said. "This financing will help allow major projects to get off the ground, creating jobs for New Yorkers and generating economic growth in our communities."
In advance of this sale, the Thruway Authority took significant actions to improve its financial health, including a right-sizing of its capital program, streamlining operations, and initiating an adjustment in commercial toll rates. The bond sale, coupled with these necessary actions, has provided a firm foundation for the Authority to finance its future operational and capital needs, and to finally begin the New Tappan Zee Bridge reconstruction project. Approximately $885 million will be used to retire the short-term debt and $250 million will go to the Authority's construction fund for non-Tappan Zee capital projects.
The sale generated significant investor interest, and demonstrated the market's confidence in the Authority's new leadership and its operating and financial plans. The sale was led by Citigroup and a deep and diverse syndicate which generated over $4 billion in orders for the $1.1 billion in bonds offered, including orders from hundreds of individual investors and more than 125 institutional accounts. This strong demand resulted in an All-In True Interest Cost of 4.19 percent for an average 30-year term, a historic low cost of capital for the Authority and for the benefit of its customers.
Standard and Poor's Ratings Services recently confirmed the Thruway Authority's existing "A+" rating, which indicates the Authority's "strong capacity to meet financial commitments." In addition, Moody's Investor Services also confirmed the Authority's longtime rating of "A-1". Both of these confirmations recognize the recent actions taken by the Thruway Board of Directors to keep the Authority on a sound fiscal foundation. The Board has made commitments to stabilize the Authority’s finances through organizational streamlining and toll action, and to maintain and improve the infrastructure of the entire Thruway system.
Last week, Governor Cuomo announced that a Project Labor Agreement (PLA) has been reached between the State Thruway Authority and 14 labor organizations. The agreement was a critical step forward in the Tappan Zee Bridge project and will save taxpayers an estimated $452 million.
Thruway Chairman Howard P. Milstein said, "The successful results of this bond sale underscore the market's recognition of the strength of the Authority Board's commitment to maintain its financial health, while providing funds necessary to maintain the reliability of its aging and critical highway, bridge and canal infrastructure. In the last year, we have made and will continue to put in place significant reforms that will ensure the Authority operates in the most efficient and cost effective manner. This was my mandate from the Governor. By terming out our outstanding short-term notes and reforming the way in which we deliver transportation services we have provided a solid and strong foundation by which the New Tappan Zee Bridge project can be advanced and successfully completed."
Thruway Executive Director Thomas J. Madison said, "The New Tappan Zee Bridge project is one of the largest bridge projects in the nation, and we remain committed to taking the actions that Governor Cuomo has directed which are necessary to reconstruct and improve this vital crossing, while creating tens of thousands of jobs for New Yorkers."