New Jersey Treasurer Brian Clymer told a group of municipal bond professionals yesterday that no firm has the edge to structure the recapitalization of the state's Transportation Trust Fund Authority.
"There is no inside track with anyone," Clymer said at a luncheon sponsored by the Municipal Forum of New York. He said that his office is accepting all pro bono proposals for a trust fund bond issue that will probably go to market late in the first quarter of 1995.
"We'll take all of those [pro bono proposals] into the mix at the appropriate time," Clymer said.
At the luncheon, Clymer chief of staff Peter McDonough said that the treasurer's office was speaking to "several" firms, including Bear, Steams & Co.; Dillon, Read & Co.; Goldman, Sachs & Co.; and other major municipal market players.
Other upcoming bond issues being planned for New Jersey include:
* A short-term, fixed-rate note sale and commercial paper program in the range of $800 million to $900 million, to be announced this month.
* Higher Education Facilities Trust Fund bonds, scheduled for sale sometime in the first quarter of 1995.
* An Economic Development Authority issue in the first quarter for the purchase and renovation of Riverview Plaza.
* $200 million tO $400 million of general obligation bonds sometime next summer.
New Jersey just sold $59 million of GO bonds on Wednesday.
Clymer also spoke about Gov. Christine Todd Whitman's recently signed executive order on competitive versus negotiated bond sales. The order, which eases an earlier ban on negotiated sales, reflects the findings .of an advisory panel that Clymer sat on, along with the attorney general and the governor's chief counsel.
Scheduled to take effect Jan. 1, Whitman's order replaces a May 1993 executive order signed by Gov. Jim Florio in the aftermath of a federal investigation of state issuance that led to the resignation of his chief of staff, Joseph Salema.
"The [Whitman] order clearly states that it is the state's general policy that bonds be sold on a competitive basis. But the Order is just as clear that exceptions may be granted allowing for negotiated sales," Clymer said.
Such exceptions are permitted under the following conditions: the sale involves complex or poor credits, the financing structure is complex, market conditions are volatile, the issue is of a large size, the sale includes variable-rate transactions, or the financing program has techniques that are new to investors.
While Florio's response "under fire" was to issue an executive order banning most negotiated bond sales, Whitman issued her order "under a sense of commitment," McDonough said.
Dennis Santo, a managing director in the public finance department at E.A. Moos & Co. in Summit, N.J., said of Clymer's comments that "the recommendations of the advisory panel are constructive and long overdue."
Santo said the biggest difference between the Florio and Whitman orders is that the state's authorities will now be able to make their own decisions about how to sell bonds.
Florio required all authorities to submit "any and all information" pertaining to the bonding order to the state treasurer. Whitman's order says that issuers may determine the method of sale, and if negotiated, file their findings with the treasurer within five days of the decision.
