Relates to agreements in connection with indebtedness of the Battery Park city authority

Title of bill

An act to amend the public authorities law, in relation to agreements in connection with indebtedness of the Battery Park city authority

Purpose of the bill

This bill reinstates the authorization for the Battery Park City's Authority ("Authority") to enter into interest rate exchange agreements in connection with indebtedness of the Authority.

Summary of provisions

Section 1 of this bill authorizes the Authority to enter into interest rate exchange agreements.

Section 2 of this bill provides for an immediate effective date.

Existing law

The Authority's power to enter into interest rate exchange agreements expired on December 31, 2003.

PRIOR LEGISLATIVE HISTORY

An identical bill was introduced in the Senate in 2005 (S5674).

Statement in support

This bill provides fiscal benefit to the Authority and to New York City by enhancing the Authority's ability to structure and restructure its debt to maximize short- and long-term financial benefit. The bill would reinstate the Authority's ability to enter into such agreements in order to achieve the most efficient cost of funds, and is comparable to the authorizations that apply to other authorities. The Authority currently has $400 million of interest rate exchange rate agreements entered into in connection with issuance of a like amount of outstanding auction rate securities (ARS) of the Authority. The Authority may need to restructure the outstanding swaps in connection with the refinancing of the ARS, and this bill would give the Authority the legal ability to affect such restructuring.

Budget implications

This bill would provide potential interest savings and consequent fiscal benefit to the Authority.

Effective date

The act would take effect immediately.