Issuing authorities authorize the list of potential obligations for defeasance

0

Issuing authorities authorize the list of potential obligations for defeasance

General bonds identified meeting the criteria for early repayment of government savings

(TRENTON) – Pursuant to the New Jersey Debt Defeasance and Prevention Act, the Treasury Department announced that the issuers met today and authorized the state to write off certain bonds from the general obligation (GO) to reduce the government’s dependence on debt and save on future interest payments.

In a public meeting via teleconference, the show’s officials – the state treasurer and the acting director of the Bureau of Management and Budget – approved a resolution outlining the list of possible GO bonds to be undone. . The list identifies the series of GO bonds that have a call date in the near future and, if canceled, will provide the state with the greatest savings over the 10-year period outlined in the legislation.

The sets of bonds listed as potential candidates for defeasance were compiled and verified by the Office of Public Finance following the approval of the New Jersey Debt Defeasance and Prevention Act on June 29, 2021.

As part of the defeasance process, the Office of Public Finance will purchase US Treasury securities using money allocated to the New Jersey Debt Defeasance and Prevention Fund for selected GO bonds. The US Treasury securities will be placed in an irrevocable escrow account with a fiduciary bank, and upon maturity of the called GO Bond, a portion of the US Treasury securities plus interest earned will repay the GO Bond in full. Any GO Bonds canceled by this process will be removed from the state’s balance sheet at the time the US Treasury securities are placed in escrow.

The exact selection of which GO Bonds from the approved list to be canceled will be made based on market factors at the time of purchases of US Treasury securities. This meeting is the first formal action in a process that is expected to last until the end of calendar year 2021.

In addition to the general bond bonds, the New Jersey Economic Development Authority and the New Jersey Building Authority will meet in the coming weeks to authorize the cancellation of additional bond rounds through the Debt Defeasance and Prevention Fund.

(Visited 4 times, 4 visits today)


Source link

Share.

About Author

Leave A Reply