State saves a bundle with new bond rating

Thursday, Aug. 30, 2001 | 11:18 a.m.

CARSON CITY -- The decision this week by Fitch Investors Service to increase Nevada's bond rating a half-grade has already saved the state's taxpayers up to $500,000.

Nevada raised $72 million for public works projects through a bond sale Wednesday. With its new AA+ rating, up from AA, there was competitive bidding among buyers. This resulted in lower interest rates on the bonds, which means that the state will have to pay less money as it pays off the debt.

"The newly received AA+ credit rating was extremely well received by the market and we clearly benefited from the highly competitive bidding on our bonds," State Treasurer Brian Krolicki said.

Krolicki said the bond rating upgrade probably saved taxpayers $300,000 to $500,000.

Three bond issues were sold. One called for $55.2 million for construction of state buildings and to buy the women's prison in North Las Vegas.

The prison was built and is being run by Corrections Corp. of America. The state is paying off a lease-purchase and would have owned the structure in 14 years. By buying out Corrections Corp. now, the state has calculated that it will save $1.43 million.

Corrections Corp. will continue to operate the facility.

A group of banks led by Goldman, Sachs & Co. of New York City was the successful bidder, proposing an interest rate of 4.366 percent. There were five other bidders with the rates ranging up to 4.550 percent.

Goldman, Sachs also submitted the low bid of 4.366 percent on $16.2 million in bonds, with the money going to preserve Lake Tahoe projects. There were two other bidders with the highest at 4.598 percent.

Hanifen, Imhoff Inc. of Denver submitted the only bid at 4.399 percent for $1.5 million in bonds to help local governments comply with the federal safe drinking water act.