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N.Y. Power Authority Enters Swap To Hedge Interest Rates

Connie Cullen

February 17, 2006


WHITE PLAINS—The New York Power Authority (NYPA) announced today that it has entered into a forward starting interest rate swap in a notional amount of $290 million at a fixed rate of 5.1923 percent, effective October 16, 2007, with Goldman Sachs Mitsui Marine Derivative Products, L.P.

Locking in this interest rate, in preparation for its future taxable bonds, is another example of NYPA’s sound and prudent management consistently recognized by the financial community with its positive bond ratings,” said Timothy S. Carey, president and chief executive officer, NYPA. “By allowing us a degree of control over the cost of upcoming commitments, this swap enables the Power Authority to continue its commitment to provide lower-cost electricity to our customers and the thousands of jobs they employ.”

This swap was entered into as a hedge against interest rates rising between now and October 2007.  In October 2007, NYPA anticipates issuing fixed- rate taxable bonds to finance costs related to relicensing and modernization costs at its hydroelectric facilities in Lewiston and Massena.

Goldman Sachs was selected as swap counterparty as the result of a competitive bidding process.   Public Financial Management-Asset Management, swap advisor to NYPA, handled the bidding process.

   About NYPA:

n NYPA uses no tax money or state credit.  It finances its operations through the sale of bonds and earns revenue from proceeds of its operations, which stems largely from the sale of electricity. n NYPA is a leader in promoting energy-efficiency, new energy technologies and electric transportation initiatives. n The New York Power Authority is the nation’s largest state-owned electric utility, with 18 generating plants in various parts of the state and more than 1,400 circuit-miles of transmission lines. 


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