Oyster Bay, New York, issued $125 million in bond anticipation notes for various capital purposes.
The bonds mature on August 23, 2024, and yield 3.35%. They received a rating of MIG 1 from Moody’s Investors Service and SP-1+ from S&P Global Ratings.
The rating “reflects the town’s strong underlying credit quality, reflected in its A1 issuer rating, healthy liquidity, and demonstrated history of market access,” according to Moody’s.
The town will use about half the bonds, some $61.4 million, to finance capital improvement projects. It will use the other half of the issuance, in addition to $3 million in cash on hand, to refund bond anticipation notes issued last year.
The largest capital improvement project, with a cost of $48 million, involves improvements to the town’s highways. Another significant portion of the notes will fund improvements to the town’s parks.
Previous bond issuances have landed Oyster Bay in hot water with the Securities and Exchange Commission (SEC). The regulator filed a complaint against the town in 2017, alleging that it omitted material disclosures in bonds sold between 2010 and 2015. The two sides approved an agreement in 2019 whereby Oyster Bay, without admitting or denying SEC allegations, would retain an independent consultant appointed by the court to review its procedures for securities offerings.
Oyster Bay is a town of 300,000 on Long Island. The bonds are general obligations of the town, backed by its full faith and credit.
J.P. Morgan Securities LLC served as lead underwriter on the issuance.