New York’s Metropolitan Transportation Authority said on Wednesday it proposes to sell $4.8 billion of bond anticipation notes over the next two years to cover damage caused by superstorm Sandy.

Under the plan, proposed on Wednesday by the authority’s board, the MTA will sell $2.9 billion of the notes in 2013 and $1.9 billion in 2014, with the proceeds earmarked for repairing damaged infrastructure.

The new debt will be repaid with reimbursements that the MTA will get from the Federal Emergency Management Agency and from insurance, officials said.

The MTA, the country’s biggest mass transit system, runs New York City’s buses, subways, commuter railroads and some major bridges and tunnels.

The MTA board said it plans to cut spending by about $25 million to help offset $29 million in increased borrowing costs in 2013.

A leading issuer in America’s municipal bond market, the MTA has nearly $32 billion of outstanding debt.

The MTA’s initial storm damage estimate is $5.02 billion, and the agency said it expects it might have to cover $950 million of that on its own.

Moody’s Investors Service rates the MTA’s transportation revenue bonds A2.

(Reuters)