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N.J. cuts bond sale after Gov. utters 'bankrupt'
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| Contributor | particleman |
| Last Edited | particleman Jan 13, 2011 07:40pm |
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| Category | Oops |
| Author | Joe Weisenthal |
| News Date | Thursday, January 13, 2011 10:30:00 PM UTC0:0 |
| Description | New Jersey Gov. Chris Christie has learned that talking about state insolvency may have a cost.
About 20 minutes after Mr. Christie, 48, told a town-hall meeting in Paramus, N.J., today that health care costs “will bankrupt” the state, the New Jersey Economic Development Authority cut its tax-exempt school-related bond offering by more than half to $712.3 million.
“It doesn't help to try and sell a $1 billion deal on the same day the governor is talking about the state going bankrupt due to health care costs,” said Mike Pietronico, who oversees $360 million as chief executive officer of Miller Tabak Asset Management in New York.
Health care spending “will bankrupt” the state unless it requires workers to pay more for medical coverage, Mr. Christie said. New Jersey will spend $4.3 billion on health insurance this year, and that cost will rise 40% within four years, Mr. Christie, a first-term Republican, said at the town-hall meeting.
“Mr. Christie made a rookie mistake,” Mr. Pietronico said. “The market is very sensitive to the word ‘bankrupt.'”
The authority also cut its taxable offering 51% to $119.9 million, with four-year bonds priced to yield 125 basis points, or 1.25% points, above a U.S. Treasury due in December 2015, the person said. The issue included $211.3 million in floating-rate notes.
The governor's office referred inquiries to the Treasury Department. “Given market conditions, it would have been unwise and imprudent to put the substantial benefits achieved with this sale at risk by trying to sell more bonds at higher rates,” Andrew Pratt, a spokesman for Treasurer Andrew Sidamon-Eristoff, said in an e-mail. |
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