Port Authority Picks Bond Underwriting Pool for Next Three Years

  • Transportation agency plans $6.5 billion in bond sales
  • Negotiated deals provide flexibilty on timing, structure

Bank of America Merrill Lynch, Citigroup Inc., Goldman Sachs Group Inc., Samuel A. Ramirez & Co. and Wells Fargo & Co. were selected by the Port Authority of New York and New Jersey to lead the transportation agency’s bond sales for three years. 

The agency estimates it will issue about $6.5 billion of debt during that time through negotiated sales, in which those banks will be used, and those awarded to any underwriter that submits the best bid during a competitive auction. Half will be for capital projects and the rest to refinance at lower interest rates, said Port Authority Treasurer Cheryl Yetka at a board meeting. 

In a negotiated sale, an issuer picks an underwriter in advance instead of selling them to the bank that offers the lowest interest cost. Negotiated sales give the Port Authority flexibility on timing deals and responding to investor demand for certain coupons, Yetka said. The investment bank leading a bond issue will be selected from the pool.

“All of this allow us to sell the debt at the lowest cost possible,” she said.

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