Friday, October 17, 2008

City goes for short-term borrowing

NEW HAVEN — With the municipal bond market frozen, the city instead sold $35 million in short-term bond anticipation notes Thursday to pay for infrastructure projects including road and sidewalk repairs and school construction.
While typical bonds are repaid in 20 years, the bond anticipation notes must be repaid within six months. The interest cost for the bond anticipation notes was 3.2 percent.
"Having the bond market up and stable in March would allow us to repay
the notes from the proceeds of 20 year bond," said Lawrence Rusconi, director of Management and Budget.
If the market were not to improve, city spokeswoman Jessica Mayorga said, the $35 million could also be repaid through new bond anticipation note sales or other types of financing.
"We feel confident that the market should be in a better place between now and then," she said.
The city delayed a $39 million bond sale last month due to prohibitively high interest rates.

--Elizabeth Benton

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