New Orleans overcomes 1 obstacle toward bond sale

AP News
Posted: Dec 08, 2009 5:52 PM

Fitch Ratings has affirmed an investment-grade bond rating for the city of New Orleans.

This moves the city one step closer to selling its first bonds in two years. A $40 million bond sale, tentatively set for Dec. 16, still hinges on favorable ratings from Moody's Investors Service and Standard & Poor's. Decisions from both are expected this week.

The city sold the first $75 million from a $260 million bond issue in 2007. A second sale, for $80 million, was planned last year but postponed due to sour market conditions and a below-investment grade rating the city still held from Standard & Poor's.

While the city bolstered its ratings earlier this year, officials opted for a smaller, $40 million sale given the still-tough market conditions and the city's own financial woes. Mayor Ray Nagin wants to use the proceeds for street work.