What may have been lost in all the bank earnings headlines this week was some very significant financial news out of California.
You may know that if California was it's own separate country, it would represent the 10th largest stand alone economy in the world. (Right after Italy).
So it was extremely positive news when the Golden state sold $6.85 billion in bonds Wednesday, including $5.23 billion in federally subsidized "Build America Bonds."
California officials reported that the debt sale was expanded from original plans of about $3 billion. The proceeds will be used immediately to restart projects, including highway upgrades, levee repairs, hospitals, libraries, natural habitat restoration and parks. All these projects were halted in December with the state treasury facing a $42 billion budget deficit.
Build America Bonds were designed to help state and local governments finance capital projects at lower interest rates. As you can see from the list of projects above, the bond sales will immediately and significantly benefit job opportunity creation in the state.
Other states have also quickly followed suit. The New Jersey Turnpike Authority just sold $1.38 billion of bonds for turnpike projects. The University of Virginia raised $250 million. And New York’s Metropolitan Transit Authority today raised $750 million for transportation improvements.
Credit is flowing again. It is no longer debatable. As cash infusions jump-start these and other shovel ready projects, the result will be more job options nationwide.
Thursday, April 23, 2009
Great News for California Bonds... and Jobs
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We see no evidence that bank credit is available for commercial real estate development in our legal practice. Private funds are being set up to gobble up distressed properties but the cash is still sitting on the sidelines waiting for prices to stabilize.
ReplyDelete@Anonymous,
ReplyDeleteSorry to hear that in your particular case you have not seen credit flow yet. Are you in any of the states mentioned in the article?
Some good news just out in your sector (DDR is a public company not a private fund)-
Scott A. Wolstein, Developers Diversified's Chairman and Chief Executive Officer, stated, "Despite the challenging macro environment, we are pleased with our first quarter 2009 operating results which came in as expected. We executed nearly 2 million square feet of leases, and are making headway in leasing space that we have recently recaptured from retailer bankruptcies."
Net income was $76.8 million, or $0.59 per share, for the period ended March 31, 2009, as compared to net income of $29.6 million, or $0.25 per share, for the prior-year comparable period.