Splitting the Swap Pie

Braun, Martin Z.
May 2003
Bond Buyer;5/19/2003, Vol. 344 Issue 31638, p1
Trade Publication
The article reports that New Jersey has hired eight advisers to competitively price its $3 billion in swaps which is part of its $8.6 billion school construction bond program. According to finance officials the derivatives will save the Garden State millions of dollars. The Dormitory Authority hired Public Financial Management to structure swap. According to the formula on the state's term sheet, which sets the parameters for the swap structure, the dealers are required to pay administrative and swap advisers' fees totaling a basis point of yield on the $3 billion swap. The state did the swap in anticipation of plans to issue floating rate debt in 2004, 2005, and 2006. New Jersey selected its swap advisers from a pool of 20 firms, weighing experience, years in the business, and the volume of municipal swaps the advisers have handled.


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