Florida’s elected Cabinet members Tuesday authorized the issuance of nearly $500 million of new debt.
The move enables Division of Bond Finance director Ben Watkins to sell $200 million of public education capital outlay bonds. The bonds will be secured by gross receipts taxes and a backup pledge of the state’s full faith and credit.
The Cabinet also authorized the sale of $280 million of Department of Transportation turnpike revenue bonds secured by tolls and other revenues of the Florida Turnpike System. Proceeds will finance various turnpike projects.
Watkins also reported the results of several recent bond sales to the Cabinet, the largest of which was the sale of $250 million of public education capital outlay bonds in February. The PECO deal was offered as $45.85 million of Series F tax-exempt bonds and $204.14 million of Series G taxable Build America Bonds.
The Series F bonds were awarded to Citi, which submitted a bid at a true interest cost of 2.33%. The BABs were awarded to Wachovia Bank, which submitted a true interest cost rate of 3.74%. The net interest rate from using BABs was estimated at 78 basis points less than a conventional tax-exempt bond issue resulting in gross interest savings of $40.4 million, Watkins said.
He said the combined interest on the Series F and G bonds was 3.64%.
