Oct 22 (Reuters) - New Jersey plans to sell $4 billion of
bonds in the U.S. municipal market to plug a hole in its
coronavirus-hit budget instead of borrowing through a Federal
Reserve loan program, a state spokeswoman said on Thursday.
Jennifer Sciortino, communications director for the New
Jersey Treasurer's office, said the current plan to use the
market, which is subject to market conditions, was recommended
by a bond underwriter.
"Bank of Americas initial response to our (request for
proposals) recommended selling $2 billion in debt through the
public markets and seeking $2 billion through the federal
Municipal Liquidity Facility (MLF)," she said in an email.
"However, markets have improved since Bank of Americas initial
recommendation and they have subsequently recommended that we go
to the public market."
The state was authorized to take out a three-year loan
through the MLF, which the Fed created in April as a way for
states and local governments to access cash as their revenue
fell in the wake of the virus pandemic. New Jersey is also able
to sell bonds due in 12 years in the market.
Details on the timing for the bond sale were not immediately
As of the end of September, only Illinois, the lowest-rated
U.S. state, and New York's Metropolitan Transportation
Authority, which was hit hard by a ridership drop due to the
pandemic, had tapped the MLF for loans, according to a Fed
report to Congress.
The MLF, which is scheduled to end on Dec. 31, is one of
around a dozen emergency credit facilities launched by the
central bank this year to help ease the blow from the pandemic.
(Reporting by Karen Pierog in Chicago
Editing by Matthew Lewis)