NEW BRUNSWICK, N.J. -- The New Jersey Turnpike Authority yesterday approved a plan to refund all its outstanding debt and named three senior managers to handle the $2.5 billion deal.

First Boston Corp., Merrill Lynch & Co., and Goldman, Sachs & Co. will senior manage the debt restructuring, which will be split into at least three separate bond sales. The size and date of each has not yet been determined, according to turnpike officials.

Included in the refunding will be the authority's 1985 record $2 billion bond issue. That deal, combined with a 1984 $500 million issue, will make the refunding package one of the largest in the history of the municipal bond industry.

But authority Chairman David J. Goldberg said the three bond sales will be spread out over a six-month period, with the first probably coming sometime in August. That deal, to be senior managed by First Boston, will refund a $500 million 1984 issue. It may be further divided into two separate issues, Mr. Goldberg said.

Meeting at turnpike headquarters yesterday, the authority's board unanimously approved the refunding of all outstanding debt as part of a plan to purchase a 4.4-mile stretch of highway from the state.

The road sale, approved by the New Jersey Legislature and signed by Gov. Jim Florio on Sunday, is intended to provide the state with $400 million of turnpike revenues to help balance the fiscal 1992 budget.

The authority's financial adviser, Lazard Freres & Co., told turnpike officials that unspent proceeds from earlier bond sales -- including a record $2 billion 1985 deal -- could not be used to purchase the road due to covenant restrictions.

Authority officials have said they would refinance even without the road sale plan, to eliminate restrictive bond covenants and provide the authority with greater financial flexibility.

Mr. Goldberg said he hopes the entire deal can be brought to market at a cost "no worse than a wash" for the authority. But he added that Lazard Freres has said that, based on current interest rates, the entire refinancing could actually be done at a savings to the authority of about $28 million over the life of the bonds.

Sources familiar with the authority's bond covenants have said it might be possible to purchase the road by executing a much smaller refunding, perhaps as little as the $400 million needed for the deal itself.

But Mr. Goldberg said he preferred to refund the entire amount of bonds, in part to eliminate any possible legal questions that might accompany an attempt to reduce the size of the refunding.

"To eliminate any significant legal issues, the appropriate thing to do would be to refund the entire sum," Mr. Goldberg said, recounting advice from authority counsel. He said some bond attorneys might have different opinions on the necessity of a total refunding, but "we're looking for a posture that would make a lawsuit unlikely and puts us in the position where we have no serious legal questions."

The debt restructuring will include calling some bonds and advance refunding others, Mr. Goldberg said.

Several of th refinancing proposals the authority has received in recent months include municipal swaps and other variable-rate financing plans, industry sources say. Mr. Goldberg said yesterday he believes the legislation requiring the turnpike to purchase the state highway also permits it to enter into such transactions, so no additional legislation will be required for the refunding.

"I have no intention of going back to the legislature, and I don't believe we have to," Mr. Goldberg said.

Co-senior managers on the First Boston portion of the refunding will be Bear, Stearns & Co. and PaineWebber Inc. Merrill Lynch's piece will have three co-senior managers: Donaldson, Lufkin & Jenrette Securities Corp.; Kidder, Peabody & Co.; and Smith Barney, Harris Upham & Co. The final section, handled by Goldman Sachs, will feature Dillon, Read & Co.; Lehman Brothers; and Dean Witter Reynolds Inc. as co-senior managers.

Another 55 firms were named as either co-managers or members of the selling groups. Authority officials said every firm that expressed an interest in the refunding was awarded a slot somewhere in the deal.

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