Riverhead Town maintains high credit rating; set to sell $22M in bonds

11/24/2011 10:00 AM |

TIM GANNON PHOTO | Tourists on NYC's Wall Street last month.

Moody’s Investors Service has upheld Riverhead Town’s Aa2 bond rating, just as the town is preparing to sell $22 million in bonds on Nov. 29.

The aa2 bond rating falls under the second-highest rating Moody’s has for long term obligation bonds, with AAA being the highest, followed by Aa1, Aa2 and Aa3. A town’s bond rating will affect the interest rates it gets on loans.

Moody’s describes a AA rating as follows: “Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.”

“We are selling $22 million in bonds on Tuesday and we are cautiously optimistic that we will get a nice, low fixed interest rate,” Riverhead Supervisor Sean Walter said.

The bonds being sold Tuesday are for various projects around the town that had previously been unfunded, Mr. Walter said.

“Under the prior administration, numerous projects were not properly funded and thus, the town has used tax dollars inefficiently,” Mr. Walter said. “By bonding these projects, we can better fund the day-to-day operations of town government, saving taxpayers’ money.”

The town was unable to sell bonds earlier this year until the annual audits for 2008, 2009 and 2010 were completed. All but 2010 have since been finished this year, and the 2010 audit is expected to be done by the end of this month.

Mr. Walter said the town did not escape criticism from Moody’s. It said the town had too much debt for its size, and it borrowed too much money against anticipated future Community Preservation Fund revenues for current open space and farmland preservation.

But at a time when the federal government’s bond rating has been downgraded, Mr. Walter said, he’s happy the town has upheld its bond rating.

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