Port Auth. Raises Interest Rate on Bonds

As governments struggled to borrow cash for long-term infrastructure projects, the Port Authority is taking steps to make its bonds more attractive to investors. WNYC's Matthew Schuerman has more.

REPORTER: In November, the government agency that operates New York's airports and Hudson River crossings couldn't find any buyers when it tried to sell $300 million worth of bonds. So on Thursday, the Port Authority took the unusual step of increasing the maximum interest rate it's willing to pay investors in the future from eight percent to 12 percent. Given that the Port Authority was accustomed to paying just five percent interest before the credit crisis hit, the latest move shows just how expensive it's becoming for the authority to borrow to build its capital projects, which include digging another rail tunnel under the Hudson River. Those higher interest costs will in turn put pressure on the authority to charge travelers higher tolls and fees the. For WNYC, I'm Matthew Schuerman.