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Mark C. Poloncarz, Comptroller
01/26/10
POLONCARZ REPORTS SIGNIFICANT RESPONSES TO BORROWING RFP

Comptroller Notes Wall Street Believes County is a Good Investment

Erie County Comptroller Mark C. Poloncarz today announced that in response to his office's request for proposals ("RFP") for the County's 2010 general obligation borrowing, a total of twelve (12) responses were received from leading financial institutions from across the country.

On January 19, 2010, the Erie County Comptroller's Office issued a RFP for qualified financial institutions to serve as underwriters for Erie County's 2010 general obligation bond issuance in an approximate amount of $175,000,000. The RFP closed today at 3 p.m.

Poloncarz said, "The last time the County issued a request for proposals to complete a capital borrowing was in 2008 when it was under a control period and had lower credit ratings from all three major ratings agencies. As a result, the County received only six (6) responses then. This year I am pleased to report that the County received twelve (12) responses, doubling the amount received last time. The large number of responses received today indicates that Wall Street views the developments for Erie County in a positive light and that the County is a good investment."

The approximately $175 million of general obligation bonds are planned to be issued in a hybrid transaction consisting of tax-exempt general obligation bonds and taxable Build America Bonds ("BABs") which are only available through the remainder of 2010 under the Federal Stimulus Program. BABs offer the County the opportunity to issue capital debt to the much larger taxable market and receive a thirty-five percent (35%) interest subsidy from the Federal government. The $175 million of bonds will be used to take out the 2009 $102,675,000 Bond Anticipation Note issued by the Erie County Fiscal Stability Authority on behalf of the County, with the remainder to be used to pay for the County's 2010 capital projects and additional sewer projects.

Please note that the Comptroller's Office has not yet reviewed any of the proposals for compliance with the RFP or the terms of each response.

The financial institutions that responded to the RFP are (in no particular order):

The County's general obligations are currently rated BBB+ (stable outlook) from Standard and Poor's, BBB+ (stable outlook) from Fitch, and Baa2 (stable outlook) from Moody's. In fact, while many states and local governments saw their credit rating reduced during the past eighteen (18) months, the County saw its rating increased by all three (3) rating agencies, including a two-step increase by Fitch last year.