NJ Turnpike paying Dennis Enright $200k to get out of auction rate bonds

Dennis J Enright, the prominent apologist for state toll authorities in the debate on concessions vs public tolling is being paid $200k by the New Jersey Turnpike. Enright said this at a meeting of the New Jersey Turnpike Commission when a commissioner, Clive Cummins questioned the fees being paid for refinancing $400m of auction rate bonds.

The Asbury Park Press (2008-04-19) reports: "Financial adviser Dennis Enright of NW Financial Group told Cummis that professionals, such as himself and bond counsels, stood to make 'a little under $500,000,' with $200,000 paid to his company for the entire debt conversion of $400 million."

Executive director Michael LaPolla said the problems in the financial markets that have seen a collapse in auction rate bonds have cost the authority between $8m and $10m. The ongoing cost is $500k/week.

We wonder if it wasn't NW Financial that put the Turnpike into auction rate bonds in the first place? And he probably got paid hundreds of thousands for that brilliant move? He says in a newsletter dated 2005: "NW Financial acts as the Financial Advisor to the New Jersey Turnpike Authority."

The Bond Buyer in 2005 reported that Enright organized what he called "Cinderella bonds" for the Turnpike. The Turnpike got into variable rate debt heavily that year. $2.35b of bonds were sold by the Turnpike when it took over the Garden State Parkway. $900m of the total financing was variable rate debt, and it got an award for "Deal of the Year".

Deals of the Year in 2005 are now being seen as reckless folly and costing huge amounts to unwind.

Enright once said with a straight face at a conference we attended that state toll authorities have the same cost structure as private concessionaires. When we intervened to describe in detail the differences between the Chicago Skyway under city and investor management, Enright's response was that this was "an exception."

TOLLROADSnews 2008-04-21