The New York State Thruway Authority yesterday announced its team of bankers to underwrite $4 billion of bonds as part of Gov. Mario M. Cuomo's four-year transportation financing program.

PaineWebber Inc. and Morgan Stanley & Co. will serve as lead managers on the first leg of the financing plan, a $200 million sale of local highway bonds in late September, the authority said in a press release.

The authority said PaineWebber will serve as bookrunning senior manager for the first issue and Morgan Stanley will serve as co-senior manager.

The bonds will finance the state's Consolidated Highway Improvement Program and so-called Marchiselli Program, which were established to fund local road and bridge work. During the four-year transportation effort, the state will issue $1 billion of bonds for local transportation systems and $3 billion for state road and bridge improvements.

The authority appointed Donaldson, Lufkin & Jenrette Securities Corp., Kidder Peabody & Co., Lehman Brothers, Artemis Capital Group., and WR Lazard, Laidlaw & Mead as co-managers on the deal.

On the main portion of the financing, the $3 billion of state road and bridge projects, the authority named as co-senior managers Smith Barney Shearson; Goldman, Sachs & Co.; Dillon, Read & Co., and Bear, Stearns & Co.

These projects will be financed by leveraging money flowing into the state's dedicated highway and bridge trust fund. The fund includes a portion of the state's petroleum business tax, certain highway use taxes, and motor vehicle fees.

Smith Barney will serve as book-running senior manager for the first issue of state-related bonds. An official familiar with the deal said the authority has not determined when the sale will take place. "The deal will likely be sold before the end of the state's fiscal year" on March 31. the official said.

The authority said in a press release that it will announce co-managers for the transaction "prior to the marketing of the bonds."

The governor's transportation plan, which received legislative approval in March, is the subject of a lawsuit challenging the constitutionality of bond sales that first do not receive approval from New York State voters.

Several underwriters interviewed, citing bond counsel opinions, say the state will prevail in the case filed by taxpayer activist Robert L. Schulz. Despite their optimism, underwriters also said the Schulz suit could hamper efforts to sell the securities at the lowest possible cost.

So far, executives at Moody's Investors Service and Standard & Poor's Corp. say they have been somewhat hesitant to assess the securities given the controversy surrounding the Schulz case.

Catherine Fleischmann, an assistant vice president at Moody's, recently said the ratings agency faces a "dilemma" because "for the first time since the 1970s ... the courts will be looking at the substantive issues surrounding the sale" of debt not sold after a voter referendum.

Ernest Perez, a director at Standard & Poor's, recently called the Schulz suit a "major concern," but added that the agency will likely assess the bonds once the authority obtains a clean legal opinion.

Thruway Authority officials could be not reached for comment on the legal or credit issues surrounding the authority bonds. On Sept. 20, the state Appellate Division will hear oral arguments from the state and Schulz regarding the Thruway bonds. The state Court of Appeals is expected to ultimately decide the case.

Schulz, in a press release dated Aug. 31. said, "Securities issued without legal authority of invalidity of an enabling statute ... are generally invalid and unenforceable against the political subdivision issuing such bonds."

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