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Suffolk credit downgraded, interest rates higher

Suffolk County has sold $62.3 million in long-term

Suffolk County has sold $62.3 million in long-term bonds at an annual interest rate of 3.61 percent for various construction projects in the wake of last week’s credit downgrading by Moody’s Investor Service. (Jan. 3, 2011) Photo Credit: Photo by Ed Betz

Suffolk County has sold $62.3 million in long-term bonds at an annual interest rate of 3.61 percent for various construction projects in the wake of last week’s credit downgrading by Moody’s Investor Service.

The interest rate was higher than the 2.96 percent the county paid last fall for a similar borrowing for 20-year bonds. Christina Capobianco, chief deputy comptroller, said the bond rating played only a minor role and attributed most of the higher rate to increased interest in stock market investments and a weakening in the demand for bonds.

Moody’s last week reduced Suffolk’s bond rating from A1 to A2 and warned that future downgradings are possible if the county does not make progress in balancing its budget. However, two other major Wall Street rating agencies, Standard & Poor’s and Fitch Ratings, made no changes in the county’s ratings.

Citigroup led a consortium that won out over five other bidders.
 

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