N.Y.’s Suffolk County Selling Most Bonds Since 2011: Muni Deals

New York’s Suffolk County, home to the Hamptons beach communities, is offering its biggest bond sale in three years to finance projects from dredging its waterways to building classrooms.

The county is issuing about $79 million of general-obligation bonds via auction June 4, its largest long-term borrowing since December 2011, data compiled by Bloomberg show. Suffolk typically issues this type of security twice a year to fund capital projects, said Robert Lipp, director of the budget review office at the county legislature.

Proceeds will also go toward roadwork and sewer upgrades, as well as buildings for science and technology classrooms at Suffolk County Community College, deal documents show. Suffolk, with 1.5 million residents, has almost 1,000 miles (1,600 kilometers) of shoreline and 20 state parks.

“It’s very geographically dispersed so it results in a lot of needs,” Lipp said in an interview. “There’s many bridges and roads to repair and historical buildings, and there are various parks projects.”

The county had its rating cut in March by Moody’s Investors Service to A3, the fourth-lowest investment grade, because of reliance on one-time revenue to balance budgets. Suffolk, established in 1683 as one of New York’s 10 original counties, forecast in 2012 “significant deficits” in its general fund for 2011 through 2013, deal documents show.

Move Digested

Suffolk doesn’t expect Moody’s move in March to influence investor demand given the time since the cut, said Vanessa Baird-Streeter, spokeswoman for county Executive Steve Bellone.

In Suffolk’s $68 million sale of tax-exempt bonds in April, notes maturing in February priced to yield 0.55 percent, or about 0.31 percentage point above benchmark one-year munis, Bloomberg data show.

Fitch Ratings assesses this week’s bonds A, the fifth-lowest investment grade, citing an improvement in the county’s finances and the wealth of its residents.

The county’s median household income of about $86,000 compares with the state average of about $56,000, according to Census data.

Debt from New York issuers has earned 5.5 percent in 2014 as of May 29, trailing the 5.9 percent return of the $3.7 trillion municipal market, Barclays Plc data show.

The state joins issuers offering $5.9 billion in debt this week, up from $5 billion last week, which included Memorial Day, according to data compiled by Bloomberg.

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