Date: Dec 01, 2011
Press Release Number: 145-2011
Transaction to Provide the Port Authority with Additional Financing for One WTC
The New York State Liberty Development Corporation today sold $672 million in Liberty Bonds that will help the Port Authority finance the continuing construction of One World Trade Center.
Since the Port Authority is not eligible to issue Liberty Bonds, this “mirror bond” structure with the Liberty Development Corporation enables the Port Authority to achieve lower cost tax-exempt financing for One World Trade Center compared to higher cost taxable alternatives.
Under an innovative financing concept, the Liberty Development Corporation today sold the bonds to investors on a negotiated basis. The eight-member underwriting syndicate was led by J.P. Morgan and included five MWBE firms. In turn, the Liberty Development Corporation used the bond proceeds to acquire Port Authority Consolidated Bonds, 170th Series, which were issued on a private placement basis to the Liberty Development Corporation by the Port Authority. These bonds have been issued in the same principal amount and with the same maturity structure and interest rate as the Liberty Bonds.
Payment of the debt service on this series of Consolidated Bonds would provide the cash flow for the Liberty Development Corporation to pay debt service on the Liberty Bonds.
The transaction will provide the Port Authority with additional financing for One World Trade Center at a lower cost through the issuance of the tax-exempt Liberty Bonds. The Liberty Bonds were issued at a price of $701, 596,108.80 and are comprised of bonds due from December 15, 2039 to December 15, 2043. The resulting yield on the bonds is 4.59 percent. The Liberty Bonds and the Consolidated Bonds, 170th Series, each received an Aa2 rating from Moody’s Investors Service, AA- from Standard & Poor’s Corporation and AA- from Fitch Ratings, Inc.
In a statement, the Port Authority said, “Today’s successful pricing will allow the Port Authority to continue the momentum we’ve achieved to move One World Trade Center closer to completion, supporting the continued the revitalization of lower Manhattan and providing approximately 3,500 construction jobs for the region. It provides extremely competitive financing rates that are evidence of the market’s confidence in the Port Authority.”
More than 25 institutional investors, representing many of the market’s largest bond funds, insurance companies and money managers, participated in the financing.
Construction of One World Trade Center has now reached the 88th floor, with 16 floors to go before it tops out at the 104th floor early next year. The tower is scheduled to be completed by the end of 2013.
The Port Authority of New York and New Jersey
Steve Coleman, 212 435-7777
The Port Authority of New York and New Jersey, which does not receive tax dollars from either state, operates many of the busiest and most important transportation links in the region. They include John F. Kennedy International, Newark Liberty International, LaGuardia, Stewart International and Teterboro airports; AirTrain JFK and AirTrain Newark; the George Washington Bridge and Bus Station; the Lincoln and Holland tunnels; the three bridges between Staten Island and New Jersey; the PATH (Port Authority Trans-Hudson) rapid-transit system; Port Newark; the Elizabeth-Port Authority Marine Terminal; the Howland Hook Marine Terminal on Staten Island; the Brooklyn Piers/Red Hook Container Terminal; the Port Authority-Port Jersey Marine Terminal and the Port Authority Bus Terminal in midtown Manhattan. The agency also owns the 16-acre World Trade Center site in Lower Manhattan.