"Legislators also agreed last week to change legal language in the recently passed sales tax hike to assure credit agencies that $100 million earmarked for the Turnpike Authority would go toward paying off Big Dig debt"
Also see: Massachusetts Democrats Keep Making the Same Mistakes
The Perils of One-Party Politics: Massachusetts' Democracy
Don't you wish YOU were a BANK, taxpayers?
"Some relief for turnpike over debt repayment" by Noah Bierman, Globe Staff | July 22, 2009
The looming threat that the Massachusetts Turnpike Authority would have to pay an immediate $252 million lump sum to settle a series of sour deals with banking giant UBS diminished significantly yesterday, according to the Patrick administration.
Two of three credit rating agencies, Moody’s and Fitch, upgraded one of the authority’s bond ratings, which will protect the authority from a potential payout on four of its five investment deals, worth $186.6 million. The authority still faces the threat of being forced to pay $65.6 million to UBS for the fifth deal, a complex transaction initiated in 2001 known as an interest rate swap. The terms of this deal depend on the fate of a separate credit rating.
Jay Gonzalez, undersecretary for administration and finance, has been lobbying the credit agencies to upgrade both of these bond ratings in recent weeks, making the case that the state’s recently passed transportation overhaul would improve the turnpike’s finances. Legislators also agreed last week to change legal language in the recently passed sales tax hike to assure credit agencies that $100 million earmarked for the Turnpike Authority would go toward paying off Big Dig debt.
State negotiators are trying to get the second turnpike credit rating upgraded or work out a new agreement with UBS that would also avoid the fifth swap payment. UBS, relying on contract language, has imposed a Friday deadline to resolve the issue or force payment....
Yeah, thanks for helping out the tax cheats, UBS?
And HOW COME LABOR CONTRACTS are the only ones that can be scrapped, huh?
The swap deals with UBS were among a series of agreements in which the agency received an up-front cash payment in exchange for giving the bank the option to swap interest rates in the future. UBS gave the authority $29.1 million in 2001. But since then, authority managers and state finance specialists have grown to rue the deals.
Yeah, thanks, Bill Clinton: Massachusetts Residents Taken For a Ride
Turmoil in the credit markets and low interest rates will force the authority to pay UBS an estimated $26 million this year, the difference between fixed and variable interest rates on $800 million in turnpike debt. The Pike has been unable to refinance the deals so far.
So the BANKS are NOT HELPING OUT at all, are they?
Maybe we should toss their asses over a bridge, huh?
