The Nassau County Interim Finance Authority issued $133 million in bonds to refund previously issued securities.
The bonds mature between 2024 and 2030, yielding between 2.4% and 2.78%. They pay interest at 5%. The securities received a rating of AAA from S&P Global Ratings.
The bonds are secured by sales tax revenue.
“The rating reflects the very strong coverage provided by increasing pledged revenues,” S&P analyst Felix Winnekens said in a press release.
Nassau County sales tax revenues fell during the COVID-19 pandemic, but have since increased at a rapid clip. The county projects that it will collect $1.6 billion in sales tax revenue this fiscal year, according to the official statement accompanying the sale of the bonds.
The issuance proceeds will refund bonds the authority sold in 2021.
The Nassau County Interim Finance Authority was created in 2000 to help the Long Island county recover from a financial crisis fueled by massive borrowing. The authority now exerts some control over county purse strings.
Its role as a fiscal watchdog has drawn increasing criticism in recent years. Opponents of the authority argue that it has become too austere, and that county finances are sufficient to end the “control period” that has empowered it for much of its existence. Outside of a control period, the authority functions in more of an advisory capacity, with less budgetary authority. Supporters of the authority contend that county finances are not yet stable enough to end this period, pointing to financial turmoil at the county-funded Nassau University Medical Center as evidence.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for almost $146 million. The price reflected a premium of $13 million. Lamont Financial Services Corporation acted as financial advisor.