Michigan today will competitively sell $60 million of taxable general obligation school loan bonds to finance a deposit in the state’s school loan revolving fund.
The debt has a single maturity of April 15, 2012. Bond counsel is Dickinson Wright PLLC. The financial adviser is Robert W. Baird & Co. The bonds carry the state’s full faith and credit. The treasurer’s office will issue the bonds.
Part of the state’s regular school loan fund issuance, the bonds will finance a deposit into the revolving loan fund tapped by districts for capital improvements. A district with a loan must continue to levy a property tax each year to meet the limit for debt service until it has repaid the state, bond documents said.
Money repaid by school districts is then placed in the state’s general fund.
Moody’s Investors Service rates the bonds Aa3 with a negative outlook. Standard & Poor’s rates the debt AA-minus.
Moody’s said its rating is based on the state’s economy — one of the weakest in the country — mitigated by strong management, conservative revenue forecasts, and manageable debt and pension burdens. Its negative outlook is based on the state’s “bleak economic prospects.”
