N.Y. Power Authority Enters Swap To Hedge Interest
February 17, 2006
FOR IMMEDIATE RELEASE
WHITE PLAINS—The New York Power Authority (NYPA) announced
today that it has entered into a forward starting interest rate swap in a
notional amount of $290 million at a fixed rate of 5.1923 percent, effective
October 16, 2007, with Goldman Sachs Mitsui Marine Derivative Products, L.P.
Locking in this interest rate, in preparation for its
future taxable bonds, is another example of NYPA’s sound and prudent
management consistently recognized by the financial community with its
positive bond ratings,” said Timothy S. Carey, president and chief executive
officer, NYPA. “By allowing us a degree of control over the cost of upcoming
commitments, this swap enables the Power Authority to continue its
commitment to provide lower-cost electricity to our customers and the
thousands of jobs they employ.”
This swap was entered into as a hedge against interest
rates rising between now and October 2007. In October 2007, NYPA
anticipates issuing fixed- rate taxable bonds to finance costs related to
relicensing and modernization costs at its hydroelectric facilities in
Lewiston and Massena.
Goldman Sachs was selected as swap counterparty as the
result of a competitive bidding process. Public Financial Management-Asset
Management, swap advisor to NYPA, handled the bidding process.
n NYPA uses no
tax money or state credit. It finances its operations through the sale of
bonds and earns revenue from proceeds of its operations, which stems largely
from the sale of electricity. n
NYPA is a leader in promoting energy-efficiency, new energy technologies and
electric transportation initiatives. n
The New York Power Authority is the nation’s largest state-owned electric
utility, with 18 generating plants in various parts of the state and more
than 1,400 circuit-miles of transmission lines.
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