January 8, 2013 – A state audit issued Tuesday claims that complicated interest-rate deals called ”swaps” cost the Pennsylvania Turnpike (Aa3 / 709223S28) at least $109 million. The audit by Auditor General Jack Wagner said the risky swaps cost the turnpike that much more than if it had used fixed-rate bonds to raise money. Termination payments of swaps and associated fees alone cost $59 million, the audit said. The turnpike is losing another $49.9 million fees and interest payments on swaps that still are active, it said. Wagner‘s analysis “is incomplete and leads to incorrect conclusions,” the turnpike said in a response letter.
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