NJ Spotlight: Buoyed by investor response, NJ to move on $4B in COVID borrowing

By John Reitmeyer

Gov. Phil Murphy’s administration is expected to sign off Wednesday on a debt sale that will bring in more than $4 billion to help sustain the state budget during the lingering coronavirus pandemic.

The general-obligation bond issue was priced a day earlier than had been expected due to strong interest among investors, state Treasurer Elizabeth Maher Muoio said in a statement Tuesday.

The total interest cost of the tax-exempt debt issue, pending final approval from administration officials on Wednesday afternoon, is expected to be just under 2%, Muoio said.

“We are extremely pleased,” she said. “We believe the significant oversubscription we witnessed and the favorable interest rate we received is a sign that investors have faith in New Jersey’s fiscal outlook.”

New Jersey has been hit hard by the pandemic, with more than 285,000 COVID-19 infections reported as of this week, 16,000 deaths and public health statistics worsening by the day as a second wave takes hold. The health crisis has also brought on a series of restrictions that have diminished economic activity across the state.

Murphy, a first-term Democrat, pressed lawmakers earlier this year to authorize up to $10 billion in borrowing without voter approval to help offset anticipated revenue losses linked to the pandemic.

The New Jersey Constitution generally prohibits using borrowed money to fund current spending, but it allows for exceptions such as responding to war or a major emergency.

Read the full report here.