The New Jersey Turnpike Authority yesterday announced it will redeem more than $416 million of its record-breaking $2 billion 1985 bond deal.
Under the terms of the indenture, the redemption will be made at par plus accrued interest to the redemption date from unspent proceeds of the bonds.
The authority sold the 1985 bonds -- still the largest single sale of municipal bonds in the history of the industry -- to finance an ambitious widening program. But the plans became mired in environmental and political opposition, and had to be scaled-back dramatically.
Also, Gov. Jim Florio, as part of an effort to balance the state's budget last year, called on the authority to give the state $400 million in exchange for a section of highway connecting the turnpike to the George Washington Bridge. But restrictive bond covenants would not permit such a transaction, prompting state officials to organize a refunding.
The redemption announced yesterday is one part of a multi-pronged plan to refinance the bonds and adopt more lenient covenants allowing the road sale and the scaled-back widening program.
The precise date of the redemption has not been announced, but turnpike officials said it will probably come during the week of Dec. 2. Bonds to be redeemed will be selected at random from among the $2 billion outstanding, authority officials said.