ATLANTA - Tennessee will be in the market today with a roughly $141 million competitive sale, marking its first general obligation issuance this year, and its last one until next year.
The bonds will be sold in two series - Series A for about $126 million and Series B for $15.4 million. While the Series A bonds are not taxable, the Series B bonds are.
Public Financial Management is the financial adviser and Hawkins Delafield & Wood is the bond counsel.
Mary-Margaret Collier, the director of the state's Division of Bond Finance, said the state typically issues commercial paper to provide bridge financing for most of its capital projects. That enables it to be able to come to market with fewer long-term issuances.
"This is a pretty plain-vanilla deal," she said, noting the amortization is over 20 years.
She also said that the state had been more active issuing bonds over the last three to five years, as it worked to take out commercial paper that was sold for a myriad of projects.
"With the economy the way it is, we've decided to issue a smaller amount of debt to catch our breaths," Collier said. "In fact, during the last legislative session, only about $55 million of debt was authorized."
It will not be a part of this debt issuance.
The state is rated Aa1 by Moody's Investors Service and AA-plus from Fitch Ratings and Standard & Poor's.
In her rating report, Moody's analyst Kimberly Lyons said the state could be in store for an upgrade if it maintains structural budget balance, economic growth, and diversification. However, the state could be downgraded if there is a resurgence of spending pressures in the areas of health and education, which account for the majority of total state expenditures. The slowing economy could also affect the rating.
