After seemingly interminable delays, a new World Trade Center tower is finally rising—but now it’s encountering new financial problems. An institutional investor group is holding up the $1.3 billion bond sale that would finance the construction of Tower 4 for fear it could hurt the value of their debt holdings in the Port Authority of New York and New Jersey, which holds the debt of Tower 4, the Wall Street Journal reports. They worry that new debt would supersede the current debt.
The investors “oppose the Port Authority leapfrogging over its existing debt holders and giving away our collateral position to this new set of bondholders,” says an attorney. But Tower 4’s developer, Larry Silverstein, needs to sell the bonds to finish the project—and the Port Authority warns of construction delays if the financing isn’t settled by the end of the year. Still, the Port Authority isn’t planning to restructure the bond sale. If it goes through, the investors “will review all of our options, including litigation,” says the lawyer.