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The Port Authority of NY and New Jersey



Consolidated Bonds 244th Series

April 30, 2024


Image by Sam Mgrdichian

Proceeds of the issue will be used to finance capital improvements of The Port Authority of 

New York and New Jersey in addition to refunding $400 million of outstanding bonds.


SWS worked closely with the Port Authority to structure this transaction so that savings were concentrated in years of elevated aggregate debt service for all PA Consolidated bonds.

Marketing & Market Conditions:

During the week prior to pricing, the municipal market was dominated by new issue supply with a $14 billion calendar.

The negotiated calendar was mainly made up of a handful of transactions that saw orderly distribution to investors as some deals had to be placed at slight concessions. Record 2-, 5- and 7-year US Treasury auctions had mixed results which created some market volatility.

Lower than anticipated GDP data on Thursday combined with the higher-than-expected Core PCE Price Index caused a sell off in both equity and fixed income markets. This data indicated slower growth and continued inflation, pushing market belief that the first Fed rate cut will not occur until December.

Retail Order Period:

On the morning of the Retail Order Period, the market opened up with a positive tone as US Treasuries were slightly positive.

During the ROP, 53 unique retail accounts placed a total of $920.6 million orders (1.4x offered par, of $651.0 million), of which $275.9 million was usable after applying the 50% holdback.

A majority of the maturities were oversubscribed with oversubscription levels ranging from 1.1x (2049 term bond) to 5.6x (2030 maturity).

Institutional Order Period:

On the morning of April 30th, US treasuries were a bit weaker and the market overall was softer than the prior day. However, with the strong retail demand coupled with the non-AMT status of the offered Port Authority bonds, SWS recommended an aggressive scale to kick-off institutional pricing. Spreads for all maturities were tightened in comparison to the ROP scale. 

Maturities 2030 and the 2049 and 2054 term bonds were tightened by 5 bps while the remaining maturities tightened by 3 bps. A balance of $375.1 million of the $651.0 million was offered to institutional investors (50% of the offering had been reserved for institutions). 

During Preliminary Pricing, the transaction received $2.7 billion of institutional orders.

Combining the previous day’s retail orders, total orders equated to $3.64 billion, or 4.9x oversubscribed, from 98 different investors. Each maturity was also individually oversubscribed for, ranging from 3.0x to 10.7x.

Given the strong investor demand and the quality of the order book, SWS proposed tightening spreads further at Repricing by 3 to 7 basis points across all maturities.

Furthermore, to capitalize on the strong market attention, the Port Authority requested to increase par for the 2049 and 2054 term bonds by $50 million each, or a total increase of $100 million.

The strong investor interest in these maturities enabled spreads to be tightened by 6 bps in these years despite the upsize in par for the two term bonds.

Pricing Results:

Overall, the transaction concluded with $2.96 billion in orders (excluding stock orders), from 90 unique investors (after drops at Final Pricing). After the additional pricing adjustments at Verbal Award and reflective of dropped orders, the financing was ultimately 4.0x oversubscribed with subscription levels ranging between 2.0x – 8.40x across all maturities.

When compared to the PA’s most recent non-AMT transaction (5% coupons), the 244th transaction achieved spreads that were 11-17 bps points tighter in overlapping maturity years.

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