Issuer: State of New Jersey
Amount: $2.75 billion
Issue type: Global bond
Launched: June 25
Lead manager: Merrill Lynch
US state governments that are worried about their unfunded pension liabilities and unwilling to risk being kicked out of office by raising taxes to pay for them have found a solution: borrow the money at today's low rates and let future administrations worry about any problems that crop up. After all, that's not unlike the position of today's state leaders, who inherited the cost of generous retirement plans voted in during the 1960s and 1970s.
Government officials like to say they are saving money by borrowing at current low interest rates to invest for tomorrow's pensioners. New Jersey's $2.75 billion global bond, issued last month, is the largest offering so far. That will be topped by a forthcoming $3 billion to $4 billion issue lead-managed by Goldman Sachs for the...
