Pennsylvania will move ahead with reduced sale, cuts offering in half

By Sheri Kasprzak

New York, Dec. 4 - Pennsylvania is planning to move forward with its competitive offering of general obligation bonds on Tuesday. This news comes despite the Port Authority of New York and New Jersey's failure to pull in any bids on its competitive consolidated note sale earlier this week.

Even so, a massive cut has been made in the size of the offering, said Rick Dreher with the Pennsylvania Governor's Budget Office. The size of the offering will now be $300 million - half of the originally planned $600 million sale. Dreher said the commonwealth's decision to cut the offering size came on Monday, days before the Port Authority brought its note sale to market.

"We're still moving ahead," Dreher said in an interview with Prospect News Thursday.

"We'll take whatever actions are necessary to adjust the size of the offering or the scheduled bid date in response to market conditions."

The problem from the budget office's standpoint, Dreher said, is a lack of liquidity in the market.

"The liquidity isn't there in the market to get these bonds sold," he noted. "I think I saw somewhere that there's a $20 billion backlog [of new offerings] since September when Lehman Brothers filed for bankruptcy."

As previously reported, the Port Authority of New York and New Jersey went to market with $300 million in series ZZ consolidated notes on Wednesday but failed to draw any bidders on the competitive sale.

Pennsylvania plans to price the series 2008 G.O. bonds on Tuesday with Public Financial Management as its financial adviser.

The bonds are due 2010 to 2029, and proceeds will be used for capital facilities projects and green facilities projects.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.