JOEL STASHENKO
Associated Press Writer
NEW YORK (AP) -- The city easily sold $1 billion in bonds Tuesday to meet immediate costs from the World Trade Center disaster, selling out in just two hours as investors placed $4 billion worth of orders.
Mayor Rudolph Giuliani called the response to city bonds the strongest in New York City history. He said people were eager to ``make a statement that they support New York, but also that they realize the economy of New York is a very, very strong one.''
City budget director Adam Barsky termed the bond sale a ``home run.''
The offering through the city's Transitional Finance Authority will help the city pay trade center-related expenses such as unemployment insurance premiums, overtime, private contractors' charges for removing debris and the cost of housing and feeding rescue workers.
Giuliani had urged New Yorkers to buy the bonds as a way of showing confidence in the recovery of their city. The cost of cleaning up the trade center ruins and rebuilding the surrounding area has preliminarily been placed at $39 billion.
Jay Donnaruma, a Paine Webber analyst, said Tuesday's buyers covered the spectrum from individuals to mutual funds.While patriotism played a role in the sale, Donnaruma said the Federal Reserve's lowering of a key interest rate Tuesday was also a factor.
It made the bonds as attractive as money market accounts or certificates of deposits which investors have to pay taxes on.
``This is a safe place to be,'' Donnaruma said. ``People say, `We feel good about it. This is something we can do to rebuild.'''
The interest rate on the one-year bonds, which are free from city, state and federal taxes, is 2.1 percent.
The state has authorized city spending of up to $5.5 billion in state and federal money for trade center costs, and expanded the Transitional Finance Authority's bonding limit by $2.5 billion.
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