Lady luck will enter the market on Valentine’s Day when Atlantic City competitively sells $26.5 million of general obligation debt to help finance capital improvements.

 

The bonds will be sold via Grant Street Group’s MuniAuction on Thursday at 10:45 a.m. John G. Hudak is bond counsel for the city and the Alliance of Governmental Auditors LLC serves as Atlantic City’s auditor.

 

The Series 2008 bonds will have annual maturities through 2018. Insurance is at the bidder’s request. Moody’s Investors Service rates the deal Baa1 along with the city’s $119.9 million of outstanding debt.

 

Bond proceeds will help finance general infrastructure improvements throughout the city, including road repairs, building renovations, and equipment purchases, according to Hudak.

 

Atlantic City has a substantial tax base due to its healthy gambling community of 11 casinos that account for 70% of the tax base and employ roughly 42,000 people. Howerver, the state approved last year legislation that restricts property tax levies to 4% beginning in fiscal 2008. That new law could restrict the city fiscally.

 

“With a high dependence on property taxes to support operations, 78.1% of 2006 revenues, and recent levy increases in the 10% range, Atlantic City is expected to be pressured to reduce expenditures and/or identify alternative sources of revenue,” according to a Moody’s press release.

 

Atlantic City has a population of nearly 40,000 and is located 65 miles southeast of Philadelphia and 125 miles south of Manhattan .

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