New Jersey Schedules Record $2.6 Billion Note Sale to Repay Loan

New Jersey plans to sell $2.6 billion in notes this month, its largest-ever short-term debt sale, to repay a loan from Bank of America Merrill Lynch and bolster cash flow, said a spokesman for the state treasurer.

The offer of tax-and-revenue anticipation notes is $450 million more than the $2.15 billion borrowed last fiscal year. It would also be the most since New Jersey sold $2.65 billion in two separate deals under Republican Governor Chris Christie’s predecessor, one-term Democrat Jon Corzine, in fiscal 2006.

“We’re going to do $2.6 billion this year to pay off a $2.1 billion line of credit we’ve already drawn on with Bank of America,” Andy Pratt, a spokesman for Treasurer Andrew Sidamon- Eristoff, said in a telephone interview. “The rest of it will go towards continuing cash-flow needs throughout the year.”

The state took out $1.2 billion from the Bank of America loan in July and $900 million in August, Pratt said.

Revenue for the first three months of the fiscal year that began July 1 missed Christie’s forecast by 4 percent, putting collections about $175 million short of targets in the $31.7 billion budget he signed in June.

The state may face a “significant” reduction of its surplus for fiscal 2012, and this year’s ending balance may be lower because of additional spending or less-than-anticipated revenue, the administration said in offering statements for last month’s $400 million sale of school-construction and refunding debt.

New Jersey is scheduled to sell the notes through competitive bid as soon as Oct. 30, data compiled by Bloomberg show.

To contact the reporters on this story: Terrence Dopp in Trenton at; Michelle Kaske in New York at

To contact the editor responsible for this story: Stephen Merelman at

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