WASHINGTON -- Triple-A rated Maryland is planning to competitively sell up to $1.268 billion of general obligation bonds on March 4, according to the state treasurer’s office.
Maryland will have two competitive bids: one will be for $518 million of tax-exempt bonds and the other for up to $750 million of tax-exempt refunding bonds.
There will be no retail order period, as there was with the last GO sale in July, because of the low interest rate environment, said Susanne Brogan, deputy treasurer for public policy.
The proceeds of the tax-exempt bonds will be used to finance capital projects such as educational facilities and hospitals. The proceeds from the sale of the tax-exempt refunding bonds will be used to advance refund bonds previously issued. According to the preliminary official statement, Maryland expects to refund about $404 million of bonds issued from 2009 to 2014. The refunding is expected to produce net present value savings of about $4.3 million, the POS stated.
All three major rating agencies have reaffirmed Maryland's triple-A rating ahead of the sale. Maryland has held that rating since 1961 from Standard and Poor's, 1973 from Moody's Investors Service, and 1993 from Fitch Ratings, according to the treasurer's office.
The rating agencies praised Maryland’s strong income levels and financial management. They noted that the state has pension funding challenges but has enacted reforms in the past few years.
Maryland is one of 10 states with triple-A ratings from all three major rating agencies. The others are Alaska, Delaware, Georgia, Iowa, Missouri, North Carolina, Texas, Utah, and Virginia.
“Retention of the AAA ratings affirms the strength and stability of Maryland bonds during difficult and volatile times,” Maryland Treasurer Nancy Kopp said in the release. “This achievement allows us to continue to invest in our communities’ schools, libraries, and hospitals while saving taxpayers millions of dollars thanks to the lower interest rates that follow from these ratings.”
This is the first GO bond sale since Larry Hogan, a Republican, became Maryland’s governor. Hogan, Kopp and Comptroller Peter Franchot make up the Maryland Board of Public Works, which will oversee the competitive sales in the Goldstein Treasury Building in Annapolis.
Maryland typically has competitive GO bond sales twice a year. The state treasurer's office said it expects to have another sale in July or August.
