"Creditor backs off on Turnpike debt; Threat eases on $71m lump sum" by Noah Bierman, Globe Staff | October 22, 2009
The Patrick administration yesterday came close to resolving one of the uglier financial chapters in the tortured history of the Massachusetts Turnpike Authority.
Officials persuaded financial giant UBS to back off a threat to collect an immediate $71 million lump sum from the toll agency. The payment had been feared for about a year as a result of a complex 2001 financial deal known as a swaption - one of several the agency entered into with UBS - that turned sour amid problems with the international credit markets and the Turnpike Authority’s poor credit rating.
Also see: Lying Looters Large and Small: Secret Stashes and Secret Deals
At one point, the agency was in danger of owing at least $260 million in immediate cash on these deals that it had no ability to pay.
While OUR COMMUNITIES are DEVASTATED!
Jay Gonzalez, secretary for administration and finance, negotiated with the banks and the credit rating agencies to avoid the large payments. He persuaded them that a reorganization of the state’s transportation system, as well as a $100 million annual infusion from the Legislature, had bolstered the Turnpike Authority’s credit rating enough to ensure it would be able to pay off future bond obligations.... debts, which total more than $2 billion.
Related: UBS Cuts Massachusetts a Break
Oh, so the SALES TAX HIKE is going for BANK PAYMENTS, not SERVICES, huh?
And THEY ACTUALLY WANT to INCREASE TAXES MORE?
So WHO is getting the PAYOFF THIS TIME, you pathetic pustules of puke?
Oh, a SELF-SERVING measure to boot!
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The UBS swaption deals - involving the trading of interest rates - may no longer pose a catastrophic threat, but they could continue to cost the turnpike tens of millions of dollars in monthly payments. The authority budgeted $36 million for payments this year alone.
It HURTS just to READ THAT!
This is where your TAX MONEY is GOING, Bay-Staters!
Not FOR SERVICES, but to PAY OFF BANKS for BAD DEALS the "PUBLIC SERVANTS" made!
Gonzalez and others are hoping that yesterday’s news, combined with loosening in international credit markets, will allow the Department of Transportation to refinance debt to hedge against the current losses. Depending on how much debt the agency is able to refinance, it could mitigate some, if not all, of the cost. The initial deals were made when the Turnpike Authority was struggling for cash to pay off spiraling Big Dig costs. They generated $29.1 million at the time, but have since been criticized as too risky and complex for a government entity, and ultimately, too costly....
Related: Massachusetts Democrats Keep Making the Same Mistakes
Senator Mark C. Montigny, a New Bedford Democrat who has been a longtime critic of the complex financing deals, said he remains troubled that the Patrick administration has resisted a thorough investigation into the origins of the deals, pointing out that they have already cost millions of dollars. “They’re so complex and there’s so many hands dirty,’’ he said. “From start to finish, this has been a lousy deal.’’
Unless you were UBS, right?
UBS spokesman Doug Morris said in a statement that the company is pleased with the latest resolution and looks forward to dealing with the new Massachusetts Department of Transportation when it assumes responsibility for the deals.
Yeah, all criminals like an easy touch!
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Related: UBS Picks Up Pike
