N.J. seeks Wall St. investment in bonds
January 21, 2013By Phil Gregory
New Jersey is urging Wall Street firms to invest in local government bonds for rebuilding along the Shore.
Many coastal towns have lost a significant portion of their tax base because of the damage from Hurricane Sandy.
The state Department of Community Affairs says most of the losses are temporary, and those Shore towns are still a sound investment option because the state has the authority to ensure the borrowing for the bonds is repaid.
The state's proactive statement should give investors the assurances they need, says Bill Dressel of the New Jersey League of Municipalities.
"They want to make sure that there's going to be enough collateral to be able to pay off those bonds," he said. "I think that what the state is doing here is making sure that if there is any nervousness that it should be for naught."
Dressel says Shore towns will become economically viable as they rebuild, and it does not make sense to lower their bond ratings.