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New Hyde Park Receives Double-A Rating on 2012 Road Bond

Village to pay 1.84 percent interest on 13-year loan for 2012 road project.

Credit rating service Standard & Poor’s recently issued a AA-stable rating on the $1.3 million bond used to pay for the 2012 road improvement project in New Hyde Park, allowing the village to obtain a 1.84 percent interest rate on its newest loan, which will be paid back over 13-years.

“Which is unbelievably good,” deputy mayor Robert Lofaro said during a village board meeting on December 18 at the village hall. “We’re delighted that, I’d like to say it’s almost free money but we still have to pay 1.8 percent on that money but for 13 years, the net effect of 1.84 percent is incredible.”

The 2012 road construction project, which suffered delays due to Hurricane Sandy, was recently completed.

“There are a number of punch list items that we have the contractor working on but the asphalt top coats have been laid, the curbing is done, the sod has been planted, sidewalks and aprons have been completed so the 2012 road improvement project at this point has been substantially complete,” Lofaro said.

Standard & Poor’s also reaffirmed the other bonds that the village has outstanding with that same rating. The firm also reported the village’s financial picture is “strong and is expected to remain as such,” according to the deputy mayor with a “moderate” debt burden at 2.9 percent of market value, which is considered low. Carrying charges are low at 9 percent of expenditures in fiscal year 2012, despite what the firm said was “an extremely rapid principal amortization.”

New Hyde Park is set to retire 91 percent of its principal over the next 10 years.

“In this market, there are four downgrades to every one upgrade,” Lofaro said, “so the fact that we remain AA-stable is an outstanding reflection on the folks of the village, the clerk-treasurer and the superintendent as well as the village board and their diligence in managing the budgets.”

The actual funding of the bond took place on December 20. Lofaro estimated that the amount would “be immediately turned around and paid to the contractors” doing the roadwork.

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Patronage Troll December 27, 2012 at 10:44 PM
Hey Bobby, I assume that this bond is being pre-refunded and you are not simply utilizing accounting measures to merely pay the equivalent of a "balloon" like Nassau County does. "Being set" to retire debt is not necessarily the same as actually doing it. If this is an honest representation of the situation you have my admiration and respect. Otherwise welcome to the world of triple and quadruple bookkeeping. ~WIZ~
Bob Lofaro December 28, 2012 at 02:52 AM
Hi Wiz, The Village retires $400k of debt each year. We do not "balloon" and pay interest only like others, or use pre-refunded bonds to get better interest rates. At 1.84%, we are set to get good use from other people's money to pave our roads. And the benefit in the reduced price we pay for the road work based on the economy of scale of a larger project more than covers the cost of the interest

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