The Triborough Bridge and Tunnel Authority sold $770.1 million in bonds to refund previously issued securities.
The bonds mature between 2030 and 2039, yielding between 2.97% and 3.43%. They pay interest at 5%. The securities received a rating of AA+ from Fitch Ratings, AA+ from Kroll Bond Rating Agency, and AA+ from S&P Global Ratings.
The issuance follows New York Governor Kathy Hochul’s decision to pause the implementation of a congestion pricing program, which was due to begin on June 30. The plan had called for a $15 toll on most vehicles entering lower Manhattan. At the beginning of June, Hochul said she would “indefinitely pause” the program.
That could have a major impact on the Metropolitan Transportation Authority (MTA), which manages public transit in New York City and was banking on the congestion pricing plan to provide some $15 billion in capital funding. The pause could “have an adverse impact on MTA’s operating and debt service budget,” the official statement accompanying the sale of the bonds reads.
The Triborough Bridge and Tunnel Authority, also known as MTA Bridges and Tunnels, may now have to issue bonds earlier than it anticipated, according to the bond documents. “This earlier debt issuance could increase debt service costs,” the documents add.
The authority will use the issuance proceeds to refund bonds that the MTA sold in 2009, 2010, and 2016.
MTA Bridges and Tunnels has already sold more than $2 billion in bonds this year, including a blockbuster $1.6 billion issuance in February and a $592 million issuance in May.
The bonds are special obligations of MTA Bridges and Tunnels, payable by payroll mobility taxes.
J.P. Morgan Securities LLC served as lead underwriter on the issuance, purchasing the bonds for $880.9 million. The price reflected a premium of $114.3 million and a discount of $3.5 million. Public Resources Advisory Group, Inc and Sycamore Advisors, LLC acted as financial advisors.