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Posted at 11:23 AM ET, 01/ 4/2011

McDonnell flies to New York to make pitch to bond agencies

By Anita Kumar
Anita Kumar

Virginia Gov. Bob McDonnell, who has been criticized by Democrats for a proposal to borrow nearly $3 billion for the state's ailing roads, flew to New York Tuesday to meet with bond rating agencies.

McDonnell (R) will meet with representatives of Moody's, Standard and Poor's and Fitch and visit the New York Stock Exchange.

The three bond rating companies originally wanted to meet with Virginia's governor about his job creation efforts, McDonnell spokeswoman Stacey Johnson said. But it's likely he also will speak about the state's AAA bond rating.

McDonnell was accompanied on the day-long trip by House Majority Leader Kirk Cox (R); Del. Lacey Putney (I), chairman of the House Appropriation Committee; Sen. Charles Colgan (D), chairman of the Senate Finance Committee; Sen. Edward Houck (D), a budget negotiator; Finance Secretary Ric Brown; State Treasurer Manju Ganeriwala and Senior Economic Adviser Bob Sledd.

McDonnell announced last month that he will ask legislators to spend $150 million from last year's budget surplus and $250 million recouped from an audit of the Virginia Department of Transportation, as well as issue two bonds totaling $2.9 billion.

The Debt Capacity Advisory Committee, made up of legislative and gubernatorial staffers, voted Nov. 20 to approve a tweak in the model used to determine the state's annual debt capacity. The state still will be eligible to borrow the same amount over a decade but more money would be available under this interpretation during the first few years.

Some Democrats are opposed to that change and issuing the $2.8 billion in bond -- about $1.8 billion in bonds approved in 2007 and about $1.1 million in bonds to be paid back with federal funds.

Governors regularly meet with bond rating agencies but Johnson said McDonnell specifically requested this trip to promote Virginia to the business and financial community.

She said the Wall Street bond rating firms have previously been briefed on the changes to the debt capacity model in Virginia and understand them.

The Virginia Economic Development Partnership will host a reception Tuesday night that will be attended by numerous business and financial leaders who either are located in the state or may be interested in opportunities in Virginia in the years ahead.

By Anita Kumar  | January 4, 2011; 11:23 AM ET
Categories:  Anita Kumar, Robert F. McDonnell, Transportation  
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