Georgia Touts Triple-A, $314M GO Sale, Draws Strong Retail Interest

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BRADENTON, Fla. - Gilt-edged Georgia said it received strong retail interest yesterday in $314.5 million of general obligation bonds, attributing some of the demand to its public education and advertising campaigns. The sale is expected to continue today for institutional investors.

The fixed-rate bonds are being sold in two series, like most Georgia GO deals. This offering includes $9.5 million of Series 2009C five-year bonds and $305 million of Series 2009D 20-year bonds. Pricing information was not available by press time yesterday.

Proceeds of the bonds will fund a variety of state projects.

On Friday, Gov. Sonny Perdue issued a press release notifying potential investors about this week's bond sale. Perdue heads up the Georgia State Financing and Investment Commission, which approves state bond sales.

"In these challenging economic times, this bond offering gives Georgians the opportunity to invest in their own state while strengthening their portfolio," Perdue said. "At the same time Georgia investors add a stable, non-taxable investment to their collection of investments, they will also help to build schools, state facilities and other projects that put their neighbors to work."

State officials also purchased full-page ads in major city newspapers to inform readers about the current offering and relaunched their Web site at www.buygeorgiabonds.com to provide prospective investors with information about the sale. Similar tactics were first used in early February when the state officials sold $613.8 million of GO bonds in their first-ever negotiated new-money deal.

Georgia typically sells its bonds competitively but went the negotiated route after the credit crisis disrupted the bond market.

The current deal is rated triple-A by all three major rating agencies, which also maintained stable outlooks on Georgia's credit even amid declining revenues. Analysts at all three agencies noted that state officials have long displayed strong fiscal management practices but they face obstacles as the recession takes hold in Georgia.

"The outlook for Georgia's general obligation credit rating is stable based on Moody's expectation that the state will take appropriate actions to manage the changing economic conditions and revenue shortfalls it faces, and that Georgia's legal provisions and historically conservative approach to financial management will help preserve balanced operations," said a report by Moody's analyst Ted Hampton.

Merrill Lynch & Co. is the book-runner for this week's deal.

Other firms in the syndicate are Citi, Jackson Securities, JPMorgan, Morgan Keegan & Co., Raymond James & Associates Inc., SunTrust Robinson Humphrey, and Wachovia Bank NA.

Public Resources Advisory Group is the state's financial adviser.

Smith, Gambrell & Russell LLP and Thomas Kennedy Sampson & Tompkins LLP are co-bond counsel. King & Spalding LLP is underwriters' counsel. Golden & Associates PC is disclosure counsel.

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