JPMorgan to Buy Any Unsold New Jersey Debt in Biggest Note Deal

Not enough buyers for $2.6 billion of New Jersey notes? No problem.

JPMorgan Chase & Co. (JPM), underwriter for the sale, will purchase any unsold debt from the state’s tax-and-revenue anticipation note deal set to price Nov. 15, according to bond documents. It’s New Jersey’s largest-ever short-term debt sale and will repay a loan from Bank of America Merrill Lynch.

JPMorgan will price the notes at a yield of 0.35 percent or less, with the bank buying any remaining debt.

“The underwriter will purchase any unsold Series C notes, at a yield agreed upon with the state which shall not exceed thirty-five basis points,” according to bond documents.

Andy Pratt, a spokesman for New Jersey Treasurer Andrew Sidamon-Eristoff, didn’t immediately respond to voicemail and e- mail requests for comment.

Elizabeth Seymour, spokeswoman for JPMorgan, confirmed the bank’s obligation to buy any residual notes.

JPMorgan’s commitment to buying any remaining debt was first reported by Dow Jones Newswires.

The state originally planned to sell the short-term debt, which matures June 2013, through competitive bid last month. Superstorm Sandy changed those plans. The storm slammed into New Jersey on Oct. 29 with hurricane-force winds and surging floodwaters, leaving half the state in the dark.

To contact the reporter on this story: Michelle Kaske in New York at mkaske@bloomberg.net; Elise Young in Trenton at eyoung30@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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