Despite a rash of Wall Street downgradings, Suffolk County sold $60.09 million in long-term bonds for various capital projects at an interest rate of 2.95 percent, lower than bond rates last fall and a year ago before the county's credit rating was dropped.
Suffolk Comptroller Joseph Sawicki said Bank of America Merrill Lynch was the lowest among four bidders who offered rates on the 14-year bonds. Morgan Stanley offered 3.33 percent; UBS, 3.48 percent; and TD Securities, 3.75 percent.
"It was a pleasant surprise," said Sawicki after the late-morning sale. "Obviously the investors have faith that Suffolk County will weather this financial storm and we have a plan to mitigate . . . projected shortfall." Earlier, county experts had estimated that interest costs on bonds could be as much as $60,000 a year higher because of downgradings.
The county's bond rating last month was downgraded by Standard & Poor's by two levels to A+ from AA, and Fitch Ratings lowered the county one notch to A+ from AA- and assigned a negative outlook. Moody's Investor Service also lowered the county's bond rating two notches in March to A1, but maintained that rating for the current borrowing.
Those downgradings came after a county blue-ribbon panel in March warned that Suffolk is facing a shortfall of $530 million by 2013. Since then, County Executive Steve Bellone has instituted a budget mitigation plan to resolve about $160 million, and is seeking concessions from unions on health benefits.
The comptroller said the sale came after the county officials took the unusual step Monday of holding a telephone conference call with 17 representatives of a dozen financial firms. Bellone made a 10-minute presentation on Suffolk's financial problems and answered questions in a meeting that lasted about 25 minutes. "We wanted to take the extra step to reassure investors," Sawicki said.
Last October, the county sold $76 million in bonds for capital projects at an interest rate of 3.29 percent, and a year ago the county sold $101.1 million in bonds at 3.51 percent.