BRADENTON, Fla. — Gilt-edged Georgia said yesterday that its general obligation bond sale earlier in the week sold at some of the lowest interest rates in its history.
The state sold $9.5 million of five-year GO bonds, Series C, and $305 million of 20-year GO bonds, Series D. Proceeds will go to build new schools, public safety projects, hospital improvements, and other infrastructure projects throughout the state.
The state locked in a rate of 1.54% on the five-year bonds — the lowest rate in Georgia’s history — and 3.8% for the 20-year bonds, which represented the second-lowest rate for the state. The historic rates translate into an annually recurring debt service savings of $2.3 million compared to originally budgeted amounts, officials said.
Market conditions were so favorable during pricing that the state upsized the deal by adding a $149.7 million GO bond refunding piece, Series E, with 10-year maturities.
The state said it captured net savings of $32.6 million on the refunding of GO bonds issued between 2001 and 2003 without extending maturities. Officials said the savings would be used to pay off bonds maturing on July 1 and that would free up funds to meet other needs in the fiscal 2010 budget.
“In a year where revenues are down and the budget has been trimmed, we know taxpayers appreciate the state’s continued commitment to manage the budget and our bond program conservatively,” Gov. Sonny Perdue said in a release. “We are spending wisely and realizing savings opportunities whenever available.”
Merrill Lynch & Co. was the book-runner for this week’s deal. Other underwriters were 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.
