Ratings aren’t everything.
That was the lesson from the announcement that Minnesota sold $769 million in general obligation and trunk highway bonds on Tuesday — at an interest rate more favorable than the one received a year ago, before the state’s credit-worthiness was downgraded by two Wall Street rating agencies.
Tuesday’s 20-year bonds, which will finance state construction projects, drew a 2.82 percent interest rate.
That compares with 4.30 percent in August 2010, before Standard & Poor’s and Fitch advised investors that Minnesota no longer merits their top governmental rating.
The explanation: Government-issued debt is popular with investors who are just now looking for relatively safe harbors for their funds.
The good news from Tuesday’s bond sale does not mean that the downgrade was meaningless.
The bonds might have drawn a still lower interest rate had Minnesota kept its top rating. A return to the good graces of the nation’s investment advisers is still much to be desired.
But there’s another lesson Minnesota policy-makers ought to draw from Tuesday’s word from Wall Street. If ever there was a good time for the state to catch up on its backlog of infrastructure construction projects, it’s now.
The 2012 Legislature should not pass up the low-interest opportunity today’s market affords. It ought to pass a major bonding bill.
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Lori Sturdevant is a Star Tribune editorial writer and columnist.
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