LIPA trustees to vote Wednesday on $2.4 billion in new borrowing

LIPA trustees on Wednesday will be asked to allow the authority to issue up to $2.375 billion in new borrowing, adding to a debt load that tops $7 billion.

According to a resolution on LIPA's website Tuesday, the offerings include up to $1.375 billion in electric system revenue bonds to pay for system improvements, underfunded PSEG-worker pension plans, new computer systems and refunding of existing LIPA bonds.

Trustees also will vote on a transaction for up to $1 billion in senior lien notes and commercial paper notes. The notes can be used for system improvements, to pay off operating costs, among other things, the resolution says.

LIPA already has more than $7 billion in debt, with $352.7 million in anticipated interest expense this year, up $21 million from 2013. In its 2014 budget, the authority said it planned to end this year with $7.76 billion in debt.

Gov. Andrew M. Cuomo's LIPA Reform Act included measures for refunding over $2 billion of LIPA debt. A new Utility Debt Securitization Authority was formed for the purpose of refinancing that debt and issuing new securities.

Wall Street firms, among others, made upward of $25 million on the transactions.