With state Treasurer Kate Marshall announcing Nevada has finished the sale of $131 million in general obligation bonds, I’m left with a lot of questions about whether this will have much of an impact on a state mired in recession and high unemployment.
Here’s part of the announcement:
“The average interest rate was 3.69 percent, one of the lowest interest rates the state has received and significantly lower than the 4.3 percent sale of similar bonds in July 2008, thus lowering the state’s borrowing costs. The sale was managed by Barclays Capital and Merrill Lynch.
“’For the first time, the State of Nevada is selling Build America Bonds to take advantage of the federal subsidy program available through the American Recovery and Reinvestment Act,’ Marshall said. “Our successful sale was a direct result of our ability to sell Build America Bonds at the favorably low interest rates available in today’s market place for states with a solid credit rating, like Nevada.’ As part of the Build America Bond program, the state receives a 35 percent interest subsidy from the federal government.
“Following a review of the state’s financial stability by the three rating agencies last month, Nevada maintained its high ‘AA’ credit rating. ‘We presented a very good picture of Nevada’s economic outlook to the rating agencies, with the assistance of Department of Administration Director Andrew Clinger; Department of Employment, Training, and Rehabilitation Chief Economist Bill Anderson; other state agencies; and the tremendous input we received from our BRAT (Bond Rating Advisory Team) members, which all played a major role in the state continuing to benefit from our good credit rating at a time when many states are being significantly downgraded.’”