For the fourth year in a row, Colorado will issue about $500 million of tax and revenue anticipation notes to cover cash flows for the new fiscal year.
The notes, bearing top ratings from Moody's Investors Service and Standard & Poor's, are expected to come to market July 15.
Proceeds will help the state to meet its seasonal cash needs for the public schools in July, September, December and March. Revenues to repay the notes arrive in April, May, and June. The notes will mature on June 26, 2015, four days prior to the end of the state's fiscal year.
The state's projected ending cash balance in June 2015, after repayment of the notes and payment of interest is $348 million.
"This ending balance represents a $270 million increase over the projected beginning balance for the year, $78 million," wrote Moody's analyst Kenneth Kurtz.
The state plans to issue separately secured notes called E-TRANs to finance local school cash flow, according to Standard & Poor's. The education notes will be secured by revenues from school districts in the pool and related income.
Colorado's cash flow forecast is based on the state's adopted fiscal 2015 expenditure budget and an updated fiscal forecast from the state's office of state planning and budgeting.
"Colorado estimates its internally borrowable resources will be at a level we view as very substantial: $4.1 billion at fiscal end 2014, up from the $3.4 billion it projected last year for fiscal year-end 2014," wrote S&P analyst David Hitchcock. "This would produce total cash coverage by combined funds of 9.25x, when adding in internally borrowable resources."
Colorado carries an issuer credit rating of AA from Standard & Poor's. Moody's Investors Service rates the state Aa1. Outlooks are stable.
