Port Authority to Sell $1 Billion in Taxable Debt for WTC

The Port Authority of New York and New Jersey, which boosted fares on bridges, tunnels and PATH trains yesterday, plans to sell $1 billion in 40-year debt to help finance construction at the World Trade Center site.

The negotiated sale of the taxable bonds maturing in 2051, slated for next week, will be managed by Citigroup Inc. (C), according to data compiled by Bloomberg.

Proceeds will help pay for the agency’s projects at the site in Lower Manhattan, including One World Trade Center, a new transportation hub and a vehicle-security center, said Steve Coleman, an agency spokesman.

“We do these sales as the need arises,” Coleman said today in an e-mail.

The Port Authority completed a negotiated sale of $850 million in 30-year taxable bonds for the trade center site in October 2010. Those bonds were rated Aa2 by Moody’s Investors Service, its third-highest ranking, and AA- by Standard & Poor’s, fourth highest, according to Bloomberg data.

The debt traded Sept. 15 at a yield of 4.95 percent, Bloomberg data show. That compares with a yield of 3.34 percent on a 30-year Treasury bond maturing in November 2040.

The agency’s board last month voted to increase bridge and tunnel tolls for cars using E-ZPass during rush hour by $1.50, and for drivers paying cash by $4 to $12. The tolls apply to the George Washington Bridge, the Lincoln and Holland tunnels, and three bridges connecting New Jersey to Staten Island. One-way fares for commuters on PATH trains rose to $2 from $1.75.

The additional money will fund the agency’s 10-year, $25.1 billion capital program and help pay for rebuilding the original World Trade Center, which was destroyed in the Sept. 11 terrorist attacks. The agency doesn’t receive tax revenue and relies mostly on tolls and transit fares. Its $7.2 billion budget for 2011 holds operating expenses flat and contains $3.9 billion in capital spending.

To contact the reporter on this story: Esme E. Deprez in New York at edeprez@bloomberg.net;

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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