THE NEWS SERVICE OF FLORIDA: State selling bonds to investors fleeing stocks

Mar 10, 2009

Despite the ongoing credit crunch, Florida has been able to sell four series of bonds worth $775 million since January, Ben Watkins, the director of the State Division of Bond Finance told Gov. Charlie Crist and members of the Cabinet on Tuesday. Watkins said Florida has benefited from investors who have fled the stock market and were looking for more stable investments as the recession drags on. 

“We were able to take advantage of those favorable market conditions in the last 60 days,” Watkins said.

He said Florida has been well received because it has high credit ratings with rating agencies and because it was issuing bonds that are backed by the “full faith and credit” of the state.

“Because of who we are and because of being a highly regarded credit in the credit markets we have benefited from that,” he said.

But Watkins did warn that some kinds of bonds that may be issued by the state may not have as easy a time on the market. These are bonds, such as Florida Forever bonds or Lottery bonds for school construction, that rely on a single source of revenue for repayment. 

Watkins said that some potential bond buyers may be wary of bonds that are tied to a revenue source that may be going down. Florida Forever bonds, for example, are paid back with documentary stamp taxes imposed on real estate transactions.