News (USA)

Will anti-LGBT law sink North Carolina’s bond sales?

RALEIGH, N.C. (AP) — As North Carolina executive leaders move forward with a $2 billion borrowing initiative, the Office of the Treasurer is providing full disclosure to lenders about pending lawsuits surrounding the state’s new law limiting antidiscrimination policies for LGBT people.

The Council of State on Tuesday unanimously approved the first $200 million of bonds aimed at infrastructure and education projects to be issued and sold beginning in July.

Treasurer Janet Cowell said during the selling process her department will be providing up-to-date information to lenders about the status of the U.S. Department of Justice lawsuit challenging the constitutionality of the LGBT law.

“North Carolina bonds have always been very highly sought after,” she said. “We do have disclosures in full acknowledgement that there could be some economic impact.”

Since Gov. Pat McCrory signed the law in March, musicians and entertainers have cancelled sold-out shows and local tourism boards say they lost millions of dollars because of cancelled conventions and business meetings. The law has been denounced by businesses such as American Airlines, Apple and Google and the NBA and NCAA have said they have concerns about hosting games and tournaments in the state.

State Budget Director Drew Heath said despite opposition to the law, the North Carolina continues to lead the nation in combined income and sales tax revenue growth. Moody’s Investors Service attributes the state’s financial stability to “strong executive management and conservative budgeting practices.”

“All signs point to a growing strong economy even in the period since that legislation has passed,” Heath said.

North Carolina holds an AAA bond rating – the highest rating possible – from all three major bond-rating agencies. Cowell said she does not foresee any short-term changes to that rating, and long-term changes would depend on economic development and state welfare.

“There could be some individuals that may not buy for political reasons, but we’re not anticipating this will be anything but a very successful sale,” Cowell said.

McCrory says 87 percent of initial $200 million approved Tuesday will fund projects at universities and community colleges, including improvements to UNC science, nursing and business buildings across the state. The National Guard and sewer infrastructure projects will also receive funding.

The Connect NC Bond was approved by voters in March and is the largest the state has proposed since a 2000 referendum approved $3.1 billion in higher education bonds.

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