NEW JERSEY TRANSIT CORPORATION

Transcription

1 NEW ISSUE - BOOK-ENTRY ONLY NEW JERSEY TRANSIT CORPORATION RATINGS: Moody s: A3 S&P: A (See RATINGS herein) $381,790,000 Grant Anticipation Notes, Series 2014A (Federal Transit Administration Section 5307 Urbanized Area Formula Funds) Dated: Date of Delivery $101,895,000 Grant Anticipation Notes, Series 2014B (Federal Transit Administration Section 5307 Urbanized Area Formula Funds) (Federally Taxable) Maturity Date: September 15, as set forth on the inside front cover This Official Statement has been prepared by the New Jersey Transit Corporation ( New Jersey Transit ) to provide information on its $381,790,000 Grant Anticipation Notes, Series 2014A (Federal Transit Administration Section 5307 Urbanized Area Formula Funds) (the Series 2014A Notes ) and $101,895,000 Grant Anticipation Notes, Series 2014B (Federal Transit Administration Section 5307 Urbanized Area Formula Funds) (Federally Taxable) (the Series 2014B Notes and, together with the Series 2014A Notes, the Series 2014 Notes ). Tax Exemption: Redemption: Security: In the opinion of Special Counsel to New Jersey Transit, pursuant to the applicable provisions of the Internal Revenue Code of 1986, as amended (the Code ) and related rulings, regulations and judicial decisions, and assuming compliance by New Jersey Transit with the Tax Certificate (as defined herein), interest on the Series 2014A Notes is not included in gross income for Federal income tax purposes and is not an item of tax preference for purposes of calculating the Federal alternative minimum tax imposed on individuals and corporations; however, interest on the Series 2014A Notes held by corporate taxpayers is included in the relevant income computation for calculation of the Federal alternative minimum tax imposed on corporations as a result of the inclusion of interest on the Series 2014A Notes in adjusted current earnings. Interest on the Series 2014B Notes is included in gross income for Federal income tax purposes. In the opinion of Special Counsel, interest on and any gain from the sale of the Series 2014 Notes are not includable as gross income under the New Jersey Gross Income Tax Act. See TAX MATTERS herein. The Series 2014 Notes are not subject to redemption prior to maturity. The Series 2014 Notes are special, limited obligations of New Jersey Transit, payable solely from and secured by all Federal Transit Administration Section 5307 Urbanized Area Formula Funds received by New Jersey Transit ( Grant Receipts ) as described herein, and amounts on deposit in all funds, accounts and sub-accounts established under the Indenture (as defined herein) (except the Rebate Fund). New Jersey Transit s share of the Federal Transit Administration s Section 5307 Urbanized Area Formula Funds is subject to annual appropriation by the United States Congress and by the New Jersey Legislature. The Series 2014 Notes are not a general obligation of New Jersey Transit, and neither the faith and credit nor the revenues, funds and assets of New Jersey Transit (other than the Grant Receipts) are pledged or required to be used for the payment of the principal of, or interest on, the Series 2014 Notes. The Series 2014 Notes shall not in any way create or constitute any indebtedness, liability or obligation of the State of New Jersey or any political subdivision or agency thereof or of New Jersey Transit (except to the limited extent provided in the Indenture and in the Series 2014 Notes). Neither the faith and credit nor the taxing power of the State of New Jersey or of any political subdivision or agency thereof is pledged to the payment of the principal of or interest on the Series 2014 Notes. New Jersey Transit has no taxing power. See SOURCES OF PAYMENT AND SECURITY FOR THE NOTES herein for a more complete description of the security for the Series 2014 Notes. Purpose: Proceeds of the Series 2014A Notes, together with certain other available funds, will be used to: (i) refund the 2014A Certificates to be Refunded (as defined herein), (ii) fund a deposit to the 2014A Debt Service Reserve Account (as defined herein), and (iii) pay costs of issuance of the Series 2014A Notes. Proceeds of the Series 2014B Notes will be used to: (i) refund the 2014B Certificates to be Refunded (as defined herein), (ii) fund a deposit to the 2014B Debt Service Reserve Account (as defined herein), and (iii) pay costs of issuance of the Series 2014B Notes. See PLAN OF FINANCE and ESTIMATED SOURCES AND USES OF FUNDS herein. Interest Rate: The Series 2014 Notes will bear interest at the rates shown on the inside cover. Interest on the Series 2014 Notes is payable on March 15 and September 15 in each year, commencing on September 15, Denominations: $5,000 and any integral multiple thereof. Trustee: U.S. Bank National Association, Morristown, New Jersey. Issuer Contact: Chief Financial Officer, New Jersey Transit, One Penn Plaza East, Fifth Floor Newark, New Jersey, 07105; (973) This cover page contains certain information for quick reference only. Investors should read this entire Official Statement to obtain information essential to the making of an informed investment decision. The Series 2014 Notes are offered when, as and if issued and received by the Underwriters, subject to prior sale, withdrawal or modification of the offer; without notice, and to the receipt of the approving legal opinion of Decotiis, FitzPatrick & Cole, LLP, Teaneck, New Jersey, Special Counsel to New Jersey Transit. Certain legal matters will be passed upon for New Jersey Transit by the Attorney General of the State of New Jersey, and for the Underwriters by their counsel, Eckert Seamans Cherin & Mellott, LLC, Trenton, New Jersey and Philadelphia, Pennsylvania. It is expected that the Series 2014 Notes will be available for delivery to the Underwriters through DTC against payment therefor in New York, New York on or about August 6, Piper Jaffray & Co. Academy Securities Inc. Loop Capital Markets Official Statement Dated: July 24, 2014 BofA Merrill Lynch Drexel Hamilton LLC Mesirow Financial, Inc. Wells Fargo Securities Janney Montgomery Scott Ramirez & Co., Inc.

2 NEW JERSEY TRANSIT CORPORATION MATURITY DATES, PRINCIPAL AMOUNTS, INTEREST RATES, PRICES, YIELDS AND CUSIP * NUMBERS $381,790,000 Grant Anticipation Notes, Series 2014A (Federal Transit Administration Section 5307 Urbanized Area Formula Funds) Maturity Date (September 15) Principal Amount Interest Rate Price Yield CUSIP * 2015 $ 8,710, % % BV ,010, BW ,780, BX ,695, BY ,825, BZ ,055, CA ,715, CB6 $101,895,000 Grant Anticipation Notes, Series 2014B (Federal Transit Administration Section 5307 Urbanized Area Formula Funds) (Federally Taxable) Maturity Date (September 15) Principal Amount Interest Rate Price Yield CUSIP * 2014 $55,460, % % CC ,435, CD2 * Registered trademark of American Bankers Association. CUSIP numbers are provided by Standard & Poor s, CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. The CUSIP numbers listed above are being provided solely for the convenience of Noteholders only at the time of issuance of the Series 2014 Notes and New Jersey Transit does not make any representation with respect to such numbers or undertake any responsibility for their accuracy now or at any time in the future. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Series 2014 Notes as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Series 2014 Notes.

3 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS SET FORTH ON THE FRONT COVER OF THIS OFFICIAL STATEMENT MAY OVER-ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2014 NOTES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE ORDER AND PLACEMENT OF MATERIALS IN THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICES, ARE NOT TO BE DEEMED TO BE A DETERMINATION OF RELEVANCE, MATERIALITY OR IMPORTANCE, AND THIS OFFICIAL STATEMENT, INCLUDING THE APPENDICES, MUST BE CONSIDERED IN ITS ENTIRETY. THE OFFERING OF THE SERIES 2014 NOTES IS MADE ONLY BY MEANS OF THIS ENTIRE OFFICIAL STATEMENT. No dealer, broker, salesperson or other person has been authorized to give any information or to make any representations, other than those contained in this Official Statement, and if given or made, such other information or representations must not be relied upon. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2014 Notes by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation of, New Jersey Transit. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in such information since the date hereof. Upon issuance, the Series 2014 Notes will not be registered under the Securities Act of 1933, as amended, or listed on any stock or other securities exchange and the Indenture will not have been qualified under the Trust Indenture Act of 1939, as amended, in reliance upon exemptions contained in such acts. The registration or qualification of the Series 2014 Notes in accordance with applicable provisions of the securities laws of the states in which the Series 2014 Notes have been registered or qualified, if any, and the exemption from registration or qualification in other states cannot be regarded as a recommendation of the Series 2014 Notes. Neither these states nor any of their agencies have passed upon the merits of the Series 2014 Notes or the accuracy or completeness of this Official Statement. Any representation to the contrary may be a criminal offense. Neither the Securities and Exchange Commission nor any other federal, state, municipal or other governmental entity has passed upon the accuracy nor adequacy of this Official Statement, or, except for New Jersey Transit, has approved the Series 2014 Notes for sale. References in this Official Statement to statutes, laws, rules, regulations, resolutions, agreements, reports and documents do not purport to be comprehensive or definitive, and all such references are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. This Official Statement is distributed in connection with the sale of the Series 2014 Notes referred to herein and may not be reproduced or used, in whole or in part, for any other purpose.

4 This Official Statement contains a general description of the Series 2014 Notes, New Jersey Transit, and the plan of finance and sets forth summaries of certain provisions of the Indenture. The descriptions and summaries herein do not purport to be complete. Persons interested in purchasing the Series 2014 Notes should carefully review this Official Statement (including the Appendices attached hereto) as well as copies of such documents in their entirety, which are held by the Trustee at its corporate trust office. The information in this Official Statement concerning The Depository Trust Company, New York, New York ( DTC ) and DTC s book-entry system has been obtained from DTC, and New Jersey Transit takes no responsibility for the accuracy thereof. Such information has not been independently verified by New Jersey Transit, and New Jersey Transit makes no representation as to the accuracy or completeness of such information. If and when included in this Official Statement, the words expects, forecasts, projects, intends, anticipates, estimates, assumes and analogous expressions are intended to identify forward-looking statements and any such statements inherently are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those that have been projected. Such risks and uncertainties include, among others, changes in law and regulations, general economic and business conditions relating to New Jersey Transit, changes in political, social and economic conditions, regulatory initiatives and compliance with governmental regulations, litigation and various other events, conditions and circumstances, many of which are beyond the control of New Jersey Transit. These forward-looking statements speak only as of the date of this Official Statement. New Jersey Transit disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any changes in New Jersey Transit s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. ii

5 TABLE OF CONTENTS NEW JERSEY TRANSIT CORPORATION... 1 INTRODUCTION... 1 General... 1 New Jersey Transit... 2 The Series 2014 Notes... 3 Security for the Series 2014 Notes... 3 Limited Obligations... 3 Parity Obligations... 4 Recent Developments... 4 Non-Appropriation... 5 PLAN OF FINANCE... 6 ESTIMATED SOURCES AND USES OF FUNDS... 7 DESCRIPTION OF THE SERIES 2014 NOTES... 8 General... 8 No Redemption... 8 Book-Entry Only System... 8 Transfers and Exchanges of Series 2014 Notes Upon Abandonment of Book- Entry Only System SOURCES OF PAYMENT AND SECURITY FOR THE NOTES Grant Receipts Pledge of Security Pledge of Grant Receipts Funds and Accounts Flow of Funds--Grant Receipts Debt Service Fund Debt Service Reserve Fund Accounts Subordinated Indebtedness Fund Additional Notes Refunding Notes Credit Facilities Subordinated Indebtedness Investments Availability of Section 5307 Formula Funds to Pay Debt Service Amendments to the Indenture FEDERAL TRANSIT PROGRAM General History Funding of Federal Transit Program Federal Transit Program Operations New Jersey Transit Participation in the Section 5307 Formula Program Annual Apportionments Annual Apportionments to New Jersey Timing of Receipt of Section 5307 Formula Fund Apportionment Eligible Expenditures iii

6 Local Share Requirement State Appropriation of Section 5307 Formula Funds DEBT SERVICE REQUIREMENTS FOR THE SERIES 2014 NOTES NEW JERSEY TRANSIT The Act The Board Scope of Operation and Facilities New Jersey s Budget and Appropriation Process New Jersey Transit s Operating Budget Ridership Capital Program RISK FACTORS Uncertainties in Federal Funding Recent Developments Certain Covenants with Respect to Section 5307 Program Section 5307 Formula Funds Disbursed By FTA Not More Than 3 Days Prior to Debt Service Payments Limited Obligations Limitations on Remedies of Noteholders No Acceleration Provision APPROVAL OF LEGALITY TAX MATTERS Series 2014A Notes Series 2014B Notes New Jersey Gross Income Tax Certain Federal Tax Consequences Relating to the Series 2014A Notes Future Events LITIGATION RATINGS CONTINUING DISCLOSURE UNDERWRITING VERIFICATION OF MATHEMATICAL CALCULATIONS MISCELLANEOUS FORM OF THE INDENTURE... APPENDIX A INFORMATION REGARDING THE BUDGET AND APPROPRIATION PROCESS IN THE STATE OF NEW JERSEY... APPENDIX B FORM OF SPECIAL COUNSEL OPINION... APPENDIX C FORM OF CONTINUING DISCLOSURE AGREEMENT... APPENDIX D CERTIFICATES TO BE REFUNDED... APPENDIX E iv

7 OFFICIAL STATEMENT of NEW JERSEY TRANSIT CORPORATION Relating to its $381,790,000 Grant Anticipation Notes, Series 2014A (Federal Transit Administration Section 5307 Urbanized Area Formula Funds) $101,895,000 Grant Anticipation Notes, Series 2014B (Federal Transit Administration Section 5307 Urbanized Area Formula Funds) (Federally Taxable) INTRODUCTION General The purpose of this Official Statement, which includes the cover page and appendices hereto (the Official Statement ), is to set forth certain information concerning the issuance by the New Jersey Transit Corporation ( New Jersey Transit ) of $381,790,000 in aggregate principal amount of Grant Anticipation Notes, Series 2014A (Federal Transit Administration Section 5307 Urbanized Area Formula Funds) (the Series 2014A Notes ) and $101,895,000 in aggregate principal amount of Grant Anticipation Notes, Series 2014B (Federal Transit Administration Section 5307 Urbanized Area Formula Funds) (Federally Taxable) (the Series 2014B Notes and, together with the Series 2014A Notes, the Series 2014 Notes ). The Series 2014 Notes and any Series of Additional Notes (as hereinafter defined) or Refunding Notes (as hereinafter defined) that may be issued in the future under the Indenture (as hereinafter defined) are collectively referred to herein as the Notes. All capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in APPENDIX A FORM OF THE INDENTURE ARTICLE I DEFINITIONS AND CONSTRUCTION - Definitions of Certain Terms. The Series 2014 Notes are being issued pursuant to the laws of the State of New Jersey (the State ), including the New Jersey Public Transportation Act of 1979, as amended (L. 1979, c.150, as amended) (the Act ). The Series 2014 Notes are authorized by a resolution adopted by the Members of the Board of New Jersey Transit, the governing body of New Jersey Transit (the NJT Board ), on June 11, The Series 2014 Notes are being issued under and secured by the Trust Indenture dated as of July 1, 2014 (the Indenture ), between New Jersey Transit and U.S. Bank National Association, as trustee (the Trustee ). A portion of the funding that New Jersey Transit receives for the support of urban mass transportation capital improvement projects that it undertakes is in the form of federal grant funding from the Federal Transit Administration

8 of the United States Department of Transportation (the FTA ). Under the FTA s Urbanized Area Formula Program, 49 U.S.C. Section 5307 (the Program or the 5307 Formula Fund Program ), funds are made available to urbanized areas to finance capital, operating and planning assistance for mass transportation ( Section 5307 Formula Funds ) through grants financed by revenue from the Mass Transit Account (the MTA ) of the Highway Trust Fund (the HTF ) as part of the Program pursuant to which the federal government reimburses grant recipients for the federal share of approved transit projects. See FEDERAL TRANSIT PROGRAM. New Jersey Transit has agreed to deposit all Section 5307 Formula Funds received by New Jersey Transit (the Grant Receipts ) in the Grant Receipts Deposit Fund established under the Indenture and held by New Jersey Transit. The Indenture provides for the withdrawal on or before each Transfer Date of amounts in the Grant Receipts Deposit Fund for deposit with the Trustee for the purpose of paying debt service on the Notes. See SOURCES OF PAYMENT AND SECURITY FOR THE NOTES Flow of Funds Grant Receipts. The proceeds from the sale of the Series 2014A Notes together with certain other available funds, will be used to: (i) refund the outstanding certificates of participation as described in APPENDIX E captioned 2014A Certificates to be Refunded (the 2014A Certificates to be Refunded ), (ii) fund a deposit to the 2014A Debt Service Reserve Account, and (iii) pay costs of issuance of the Series 2014A Notes. The proceeds from the sale of the Series 2014B Notes will be used to: (i) refund the certificates of participation as described in APPENDIX E captioned 2014B Certificates to be Refunded (the 2014B Certificates to be Refunded and, together with the 2014A Certificates to be Refunded, the Certificates to be Refunded ), (ii) fund a deposit to the 2014B Debt Service Reserve Account, and (iii) pay costs of issuance of the Series 2014B Notes. See PLAN OF FINANCE and ESTIMATED SOURCES AND USES OF FUNDS herein. The Certificates to be Refunded were issued to provide funds to finance, or reimburse New Jersey Transit for prior expenditures relating to, the acquisition of heavy rail cars, cruiser buses, heavy rail locomotives, light rail vehicles, and spare parts, or to refund certificates of participation previously issued to finance such purposes. New Jersey Transit New Jersey Transit is a body corporate and politic and an instrumentality of the State under the Act. The Act allocated New Jersey Transit for State constitutional purposes within the New Jersey Department of Transportation ( NJ DOT ), but independent of supervision or control by the NJ DOT. New Jersey Transit was created to provide an efficient, coordinated, safe and responsive public transportation system in and for the residents of the State. To implement that policy, New Jersey Transit was granted, among others, the power to operate and contract for public transit services. Currently, New Jersey Transit is one of the nation s largest providers of bus, rail and light rail transit and the only statewide provider of bus and commuter rail service. 2

9 The Series 2014 Notes The Series 2014 Notes are being issued pursuant to the Indenture and will be dated the date of their issuance and mature at the times and in the principal amounts set forth on the inside front cover page of this Official Statement. Interest on the Series 2014 Notes will be payable on March 15 and September 15 of each year, commencing September 15, The Series 2014 Notes are issuable as fully registered notes and when issued will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ), which will act as securities depository for the Series 2014 Notes. Purchases of beneficial ownership interests in the Series 2014 Notes will be made only in book-entry form in denominations of $5,000 or any integral multiple thereof. Security for the Series 2014 Notes The Series 2014 Notes are special, limited obligations of New Jersey Transit payable from and secured solely by (i) all Grant Receipts received by New Jersey Transit and (ii) amounts on deposit in the funds, accounts and sub-accounts under the Indenture (except the Rebate Fund), including investment earnings thereon. See SOURCES OF PAYMENT AND SECURITY FOR THE NOTES herein. The Series 2014 Notes are being issued as Parity Obligations (as such terms are defined in the Indenture) under the Indenture on a parity with certain other obligations that may be issued by New Jersey Transit in the future as described herein. See SOURCES OF PAYMENT AND SECURITY FOR THE NOTES. Limited Obligations THE SERIES 2014 NOTES ARE SPECIAL, LIMITED OBLIGATIONS OF NEW JERSEY TRANSIT PAYABLE SOLELY FROM AND SECURED SOLELY BY THE GRANT RECEIPTS AND THE AMOUNTS ON DEPOSIT IN THE FUNDS, ACCOUNTS AND SUB- ACCOUNTS ESTABLISHED UNDER THE INDENTURE (EXCEPT THE REBATE FUND). NEW JERSEY TRANSIT S SHARE OF THE SECTION 5307 FORMULA FUNDS IS SUBJECT TO ANNUAL APPROPRIATION BY THE UNITED STATES CONGRESS AND THE NEW JERSEY STATE LEGISLATURE. THE SERIES 2014 NOTES ARE NOT A GENERAL OBLIGATION OF NEW JERSEY TRANSIT AND NEITHER THE FAITH AND CREDIT NOR THE REVENUE, FUNDS OR ASSETS OF NEW JERSEY TRANSIT (OTHER THAN THE GRANT RECEIPTS) ARE PLEDGED OR REQUIRED TO BE USED FOR THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON, THE SERIES 2014 NOTES. THE SERIES 2014 NOTES SHALL NOT IN ANY WAY CONSTITUTE ANY INDEBTEDNESS, LIABILITY OR OBLIGATION OF THE STATE OF NEW JERSEY OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR OF NEW JERSEY TRANSIT (EXCEPT TO THE LIMITED EXTENT PROVIDED IN THE INDENTURE AND IN THE SERIES 2014 NOTES). NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF NEW JERSEY OR OF ANY POLITICAL SUBDIVISION OR AGENCY 3

10 THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE SERIES 2014 NOTES. NEW JERSEY TRANSIT HAS NO TAXING POWER. See SOURCES OF PAYMENT AND SECURITY FOR THE NOTES herein. Parity Obligations One or more Series of Additional Notes may be issued on a parity with the Series 2014 Notes, and any Notes that may be outstanding under the Indenture at the time the Additional Notes are issued, for the purpose of paying the costs of the Eligible Projects or refunding Subordinated Indebtedness issued for such purposes or issued to refund Subordinated Indebtedness originally issued for such purpose to pay costs and expenses incident to the issuance of such Additional Notes and to make deposits to any Fund, Account or Sub-Account under the Indenture. The Indenture also permits the issuance of one or more Series of Refunding Notes on a parity with the Notes, and any other Notes that may be outstanding under the Indenture at the time the Refunding Notes are issued, to refund any or all Outstanding Notes of one or more Series, to refund any obligations incurred to reimburse the issuer or issuers of one or more Credit Facilities, to pay costs and expenses incident to the issuance of such Refunding Notes and to make deposits to any Fund, Account or Sub-Account under the Indenture. See SOURCES OF PAYMENT AND SECURITY FOR THE NOTES - Additional Notes and - Refunding Notes herein. Under the Indenture, New Jersey Transit may also obtain one or more Credit Facilities (as defined in the Indenture) to secure the payment of the principal of, premium, if any, and interest on or the Purchase Price of one or more series of Notes and, at the election of New Jersey Transit, the obligation of New Jersey Transit to reimburse or otherwise make payments to a Credit Facility Issuer (as defined in the Indenture), shall constitute a Parity Obligation under the Indenture payable and secured, on a parity with Notes, by the pledge of and lien on the Grant Receipts created by the Indenture. Recent Developments The authorization for the collection of a majority of the federal motor fuel taxes and other taxes that make up the primary source of revenue for Section 5307 Formula Funds expires on October 1, Since its scheduled termination on September 30, 2009, the authorization for the current Federal-Aid Highway Program has been extended seven times through September 30, 2014, with the latest extension, the Moving Ahead for Progress in the 21st Century Act ( MAP-21 ), signed into law on July 6, The U.S. Department of Transportation ( US DOT ) has reported that, as of June 27, 2014, the MTA had a cash balance of $2.5 billion. On July 16, 2014, the US DOT projected that, based upon current spending and revenue trends, the MTA will have a balance of approximately $1.1 billion at September 30, The US DOT has further indicated that if the United States Congress does not take action to replenish the HTF, the MTA will reach a critical funding point in the fall of calendar year 2014 and, should that occur, the US DOT will be providing specific guidance on the FTA s approach in managing the resources available to transit agencies. See RISK FACTORS herein. 4

11 On July 15, 2014, the United States House of Representatives passed HR5021, the Highway and Transportation Funding Act of 2014 ( HR5021 ). HR5021 funds the highway and transit programs at current levels through May 31, 2015, an eight month extension of the programs. There can be no assurance that the Senate will enact HR5021 in its current form. The Senate could amend HR5021 and return it to the House, enact a Senate bill or take no action before its scheduled recess on August 1. In addition, HR5021 or any legislation extending the programs would be subject to veto by the President. In the event of a veto by the President, such legislation would have to be approved by the House and the Senate in each case by a two-thirds majority. See RISK FACTORS herein. As of the date of this Official Statement, New Jersey Transit has no assurance that the current authorizations will be extended or that new authorizations will be approved in the near term. Moreover, in recent years, total spending on the federal share of transportation projects has exceeded funding available from the Federal-Aid Highway Program, which includes the authorization for Section 5307 Formula Funds. Shortfalls have been made up from transfers from the general fund of the United States Treasury, but there can be no assurance that adequate funding will remain available to pay debt service on the Series 2014 Notes or on Parity Obligations that may be issued in the future. Non-Appropriation As set forth in the Indenture, the failure of New Jersey Transit to pay in full the principal or redemption price of, or interest on, any Notes, including the Series 2014 Notes, or any other Parity Obligation, when due or to observe and perform any covenant, condition or agreement on its part to be observed or performed under the Indenture or the Notes, including the Series 2014 Notes, is an Event of Default under the Indenture. See APPENDIX A FORM OF INDENTURE ARTICLE VIII EVENTS OF DEFAULT; REMEDIES OF OWNERS. Notwithstanding the foregoing, a failure by New Jersey Transit to pay in full the principal or redemption price of, or interest on, any Notes, including the Series 2014 Notes, or any other Parity Obligations, or to observe and perform any covenant, condition or agreement under the Indenture resulting from: (a) the failure of the New Jersey Legislature to appropriate to New Jersey Transit for any Fiscal Year the Section 5307 Formula Funds appropriated by the federal government as described in APPENDIX C INFORMATION REGARDING THE BUDGET AND APPROPRIATION PROCESS IN THE STATE OF NEW JERSEY in an amount at least sufficient to pay, when due, the principal or Redemption Price of and interest on any Notes, including the Series 2014 Notes, or any other Parity Obligations coming due in such fiscal year; or (b) the (i) failure of the United States Congress to appropriate Section 5307 Formula Funds to New Jersey Transit as described herein under the caption FEDERAL TRANSIT PROGRAM for any FFY in an amount at least sufficient to pay, when due, the principal or Redemption Price of and interest on the Notes, including the Series 2014 Notes, or any other Parity Obligations coming due in such FFY, (ii) failure of the FTA to apportion to New Jersey Transit Section 5307 Formula Funds that have been appropriated by the United States Congress as described herein under the caption FEDERAL TRANSIT PROGRAM for any FFY in an amount at least sufficient to pay, when due, the principal or Redemption Price of and interest on the Notes, including the Series 2014 Notes, or any other Parity Obligations 5

12 coming due in such FFY, or (iii) non-receipt of Section 5307 Formula Funds from the federal government in any FFY (other than any non-receipt of Section 5307 Formula Funds that is caused by the failure of New Jersey Transit to comply with the provisions of Section 712 of the Indenture) in an amount at least sufficient to pay, when due, the principal or Redemption Price of and interest on the Notes, including the Series 2014 Notes, or any Parity Obligations coming due in such FFY (each, an Event of Non-Appropriation ), does not constitute an Event of Default under the Indenture. Upon the occurrence of an Event of Non-Appropriation, the Trustee, on behalf of the holders of the Notes, including the Series 2014 Notes, and any other Parity Obligations, has limited remedies. The Notes are not subject to acceleration. See APPENDIX A FORM OF INDENTURE ARTICLE VIII EVENTS OF DEFAULT; REMEDIES OF OWNERS. PLAN OF FINANCE The proceeds from the sale of the Series 2014A Notes will be used, together with certain other available funds, to: (i) refund the 2014A Certificates to be Refunded, (ii) fund a deposit to the 2014A Debt Service Reserve Account, and (iii) pay costs of issuance of the Series 2014A Notes. The proceeds from the sale of the Series 2014B Notes will be used to: (i) refund the 2014B Certificates to be Refunded, (ii) fund a deposit to the 2014B Debt Service Reserve Account, and (iii) pay costs of issuance of the Series 2014B Notes. See ESTIMATED SOURCES AND USES OF FUNDS herein and APPENDIX E CERTIFICATES TO BE REFUNDED. The Certificates to be Refunded constitute all of the debt outstanding under the Trust Agreement Relating to Certain Equipment Leased by New Jersey Transit Corporation, dated as of March 15, 1999, between the Apris Group, Ltd., and The Bank of New York Mellon, as successor-in-interest to the U.S. Trust Company of New Jersey, as trustee, as amended and supplemented (the 1999 Trust Agreement ). To provide for the refunding of the Certificates to be Refunded, The Bank of New York Mellon (the Escrow Agent ) and New Jersey Transit will enter into an Escrow Deposit Agreement, to be dated as of August 1, 2014 (the Escrow Deposit Agreement ), pursuant to which the Escrow Agent shall create a special and irrevocable escrow fund (the Escrow Fund ), and within such Escrow Fund a Series 2014A Account and a Series 2014B Account, to be held by the Escrow Agent for the payment when due of the principal or Redemption Price of and interest on the Certificates to be Refunded. A portion of the proceeds from the sale of the Series 2014A Notes shall be deposited in the Series 2014A Account within the Escrow Fund and will be applied to the purchase of Security Deposit Obligations (as defined in the 1999 Trust Agreement) the principal of and interest on which, together with other funds on deposit in the Escrow Fund, will be sufficient to pay when due the principal or Redemption Price of and interest on the Series 2014A Certificates to be Refunded. A portion of the proceeds from the sale of the Series 2014B Notes shall be deposited in the Series 2014B Account within the Escrow Fund and will be applied to the purchase of Security Deposit Obligations the principal of and interest on which, together with other funds on deposit in the Escrow Fund, will be sufficient to pay when due the principal or Redemption Price of and interest on the Series 6

13 2014B Certificates to be Refunded. CALCULATIONS herein. See VERIFICATION OF MATHEMATICAL The holders of the Certificates to be Refunded will have a lien on the applicable cash and Security Deposit Obligations on deposit in the Escrow Fund. Upon execution and delivery of the Escrow Deposit Agreement and deposit of the cash and Security Deposit Obligations into the Escrow Fund, the Certificates to be Refunded shall be defeased and shall no longer be deemed to be Outstanding under, or entitled to the benefits of, the 1999 Trust Agreement and the 1999 Trust Agreement shall be defeased. ESTIMATED SOURCES AND USES OF FUNDS Sources of Funds Series 2014A Notes Series 2014B Notes Total Par Amount $381,790, $101,895, $483,685, Original Issue Premium $50,102, $0.00 $50,102, Other Funds of New Jersey Transit $38,198, $0.00 $38,198, Total Sources of Funds: $470,090, $101,895, $571,985, Uses of Funds Series 2014A Notes Series 2014B Notes Total Escrow Fund Deposit $424,624, $91,306, $515,931, Deposit to 2014A Debt Service Reserve Account $43,189, $0.00 $43,189, Deposit to 2014B Debt Service Reserve Account $0.00 $10,189, $10,189, Underwriters Discount $1,830, $277, $2,107, Costs of Issuance (1) $446, $121, $568, Total Uses of Funds: $470,090, $101,895, $571,985, (1) Includes legal fees, printing costs, Trustee s fees, Rating Service fees and other expenses relating to the issuance and sale of the Series 2014 Notes. 7

14 DESCRIPTION OF THE SERIES 2014 NOTES General The Series 2014 Notes will be dated the date of their issuance and will mature on the dates and in the principal amounts set forth on the inside front cover of this Official Statement. Interest on the Series 2014 Notes shall be payable on March 15 and September 15 of each year, commencing September 15, Interest on the Series 2014 Notes shall be computed on the basis of a 360-day year of twelve 30-day months. The Series 2014 Notes will be delivered in fully registered form only and, when issued, will be registered in the name of Cede & Co., as nominee of DTC. DTC will act as securities depository for the Series 2014 Notes. Ownership interests in the Series 2014 Notes may be purchased by or through a DTC Participant (as described below) in book-entry form only in denominations of $5,000 or any integral multiple thereof. See Book-Entry Only System below. No Redemption The Series 2014 Notes are not subject to redemption prior to maturity. Book-Entry Only System This section describes how ownership of the Series 2014 Notes is to be transferred and how the principal of and interest on the Series 2014 Notes are to be paid to and credited by DTC while the Series 2014 Notes are registered in the name of Cede & Co., its nominee. The information in this section concerning DTC and the Book-Entry Only System has been provided by DTC for use in disclosure documents such as this Official Statement. New Jersey Transit believes the source of such information to be reliable, but takes no responsibility for the accuracy or completeness thereof. The following description of the procedures and record keeping with respect to beneficial ownership interests in the Series 2014 Notes, payment of principal and interest and other payments with respect to the Series 2014 Notes to Direct Participants (as defined below) or Beneficial Owners (as defined below), confirmation and transfer of beneficial ownership interests in such Series 2014 Notes and other related transactions by and among DTC, the Direct Participants and Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the Direct Participants nor the Beneficial Owners should rely on the following information with respect to such matters, but instead confirm the same with DTC or the Direct Participants, as the case may be. Information concerning DTC and the Book-Entry Only System has been obtained from DTC and is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by, New Jersey Transit. DTC will act as securities depository for the Series 2014 Notes. The Series 2014 Notes will be issued as fully-registered securities registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of 8

15 DTC. One fully registered certificate will be issued for each Series, maturity and, if applicable, interest rate within a maturity of the Series 2014 Notes in the aggregate principal amount of each such Series, maturity and, if applicable, interest rate within the Series 2014 Notes, and will be deposited with DTC. DTC, the world s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC is rated AA+ by Standard & Poor s. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. Purchases of Series 2014 Notes under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2014 Notes on DTC s records. The ownership interest of each actual purchaser of each 2014 Series Note ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Series 2014 Notes are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Series 2014 Notes, except in the event that use of the book-entry system for the Series 2014 Notes is discontinued. To facilitate subsequent transfers, all Series 2014 Notes deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Series 2014 Notes with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual 9

16 Beneficial Owners of the Series 2014 Notes; DTC s records reflect only the identity of the Direct Participants to whose accounts such Series 2014 Notes are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of the Series 2014 Notes may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2014 Notes, such as proposed amendments to the Series 2014 Notes documents. For example, Beneficial Owners of the Series 2014 Notes may wish to ascertain that the nominee holding the Series 2014 Notes for their benefit has agreed to obtain and transmit notices to the Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Trustee and request that copies of notices be provided directly to them. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Series 2014 Notes unless authorized by a Direct Participant in accordance with DTC s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to New Jersey Transit as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts Series 2014 Notes are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Series 2014 Notes will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from New Jersey Transit or the Trustee, on payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, the Trustee, or New Jersey Transit, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of New Jersey Transit or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Series 2014 Notes at any time by giving reasonable notice to New Jersey Transit or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Series 2014 Note certificates are required to be printed and delivered. 10

17 New Jersey Transit may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Series 2014 Note certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC s book-entry system has been obtained from sources that New Jersey Transit believes to be reliable, but New Jersey Transit takes no responsibility for the accuracy thereof. NEITHER NEW JERSEY TRANSIT NOR THE TRUSTEE WILL HAVE ANY RESPONSIBILITY OR OBLIGATION, EITHER SINGULARLY OR JOINTLY, TO DTC PARTICIPANTS, TO INDIRECT PARTICIPANTS, OR TO ANY BENEFICIAL OWNER WITH RESPECT TO (I) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY DTC PARTICIPANT, OR ANY INDIRECT PARTICIPANT; (II) ANY NOTICE THAT IS PERMITTED OR REQUIRED TO BE GIVEN TO THE HOLDERS OF THE SERIES 2014 NOTES UNDER THE INDENTURE; (III) THE PAYMENT BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL OR INTEREST DUE WITH RESPECT TO THE SERIES 2014 NOTES; (IV) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS THE HOLDER OF THE SERIES 2014 NOTES; OR (V) ANY OTHER MATTER. SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE SERIES 2014 NOTES, AS NOMINEE OF DTC, REFERENCES IN THIS OFFICIAL STATEMENT TO THE OWNERS OR REGISTERED OWNERS OF THE SERIES 2014 NOTES SHALL MEAN CEDE & CO. AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE SERIES 2014 NOTES. PAYMENT MADE BY THE TRUSTEE TO DTC OR ITS NOMINEE SHALL SATISFY NEW JERSEY TRANSIT S OBLIGATIONS WITH RESPECT TO THE SERIES 2014 NOTES TO THE EXTENT OF SUCH PAYMENTS. IT IS THE DUTY OF EACH BENEFICIAL OWNER TO ARRANGE WITH ITS DTC PARTICIPANT OR INDIRECT PARTICIPANT TO RECEIVE FROM SUCH DTC PARTICIPANT OR INDIRECT PARTICIPANT PAYMENTS OF PRINCIPAL AND INTEREST, CREDIT BALANCES AND ALL OTHER COMMUNICATIONS WHICH THE DTC PARTICIPANT OR INDIRECT PARTICIPANT RECEIVES FROM DTC. Transfers and Exchanges of Series 2014 Notes Upon Abandonment of Book-Entry Only System The Owners of the Series 2014 Notes have no right to the appointment or retention of a securities depository for the Series 2014 Notes. DTC may resign as securities depository under the conditions provided in the Letter of Representations from New Jersey Transit to DTC. In the event of any such resignation, New Jersey Transit shall (i) appoint a successor securities depository, qualified to act as such under Section 17(a) of the Securities Exchange Act of 1934, as amended, notify DTC of the appointment of such successor securities depository, and transfer or cause the transfer of one or more separate Series 2014 Note certificates to such successor securities depository or (ii) notify DTC of the availability through DTC of Series 2014 Note certificates and transfer or cause the transfer of one or more Series 2014 Note 11

18 certificates to DTC Participants having Series 2014 Notes credited to their DTC accounts. In such event, the Series 2014 Notes will no longer be restricted to being registered in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names the DTC Participants receiving Series 2014 Notes shall designate, in accordance with the provisions of the Indenture. SOURCES OF PAYMENT AND SECURITY FOR THE NOTES The Notes including the Series 2014 Notes (and all other Parity Obligations) issued under the Indenture are special, limited obligations of New Jersey Transit issued pursuant to the Act. The Notes are payable solely from and secured solely by (i) Grant Receipts, and (ii) amounts on deposit in the Funds, Accounts and sub-accounts established under the Indenture (except the Rebate Fund established under the Indenture), including investment earnings thereon. THE SERIES 2014 NOTES ARE SPECIAL, LIMITED OBLIGATIONS OF NEW JERSEY TRANSIT PAYABLE SOLELY FROM AND SECURED SOLELY BY THE GRANT RECEIPTS AND THE AMOUNTS ON DEPOSIT IN THE FUNDS, ACCOUNTS AND SUB-ACCOUNTS ESTABLISHED UNDER THE INDENTURE (EXCEPT THE REBATE FUND). NEW JERSEY TRANSIT S SHARE OF THE SECTION 5307 FORMULA FUNDS IS SUBJECT TO ANNUAL APPROPRIATION BY THE UNITED STATES CONGRESS AND THE NEW JERSEY STATE LEGISLATURE. THE SERIES 2014 NOTES ARE NOT A GENERAL OBLIGATION OF NEW JERSEY TRANSIT AND NEITHER THE FAITH AND CREDIT NOR THE REVENUE, FUNDS OR ASSETS OF NEW JERSEY TRANSIT (OTHER THAN THE GRANT RECEIPTS) ARE PLEDGED OR REQUIRED TO BE USED FOR THE PAYMENT OF THE PRINCIPAL OF OR THE INTEREST ON THE SERIES 2014 NOTES. THE SERIES 2014 NOTES SHALL NOT IN ANY WAY CREATE OR CONSTITUTE ANY INDEBTEDNESS, LIABILITY OR OBLIGATION OF THE STATE OF NEW JERSEY OR ANY POLITICAL SUBDIVISION OR AGENCY THEREOF OR OF NEW JERSEY TRANSIT (EXCEPT TO THE LIMITED EXTENT PROVIDED IN THE INDENTURE AND IN THE SERIES 2014 NOTES). NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF NEW JERSEY OR OF ANY POLITICAL SUBDIVISION OR AGENCY THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE SERIES 2014 NOTES. NEW JERSEY TRANSIT HAS NO TAXING POWER. Grant Receipts New Jersey Transit is only obligated to pay principal of and interest on the Notes from its annual share of Section 5307 Formula Funds. New Jersey Transit s share of the Section 5307 Formula Funds is subject to annual appropriation by the United States Congress and the New Jersey Legislature. See APPENDIX B INFORMATION REGARDING THE BUDGET AND APPROPRIATION PROCESS IN THE STATE OF NEW JERSEY. See FEDERAL TRANSIT PROGRAM for descriptions of the Section 5307 Formula Fund Program and the methods by which the amount of Section 5307 Formula Funds available to New Jersey Transit on an annual basis are determined. 12