CHICAGO — Wisconsin takes competitive bids on $391 million of general obligation debt Tuesday with more than half earmarked for transportation projects.
"This is the second of what is typically two new money general obligation sales we do in a calendar year that reflect our cash needs," said capital finance director David Erdman. "More than half are for transportation related projects."
The bonds mature between 2017 and 2036 and offer an eight-year call instead of the traditional 10-year; Wisconsin has been using the eight-year call on recent sales due to market reception, said capital finance director David Erdman.
State leaders tussled during the recently ended legislative session over transportation funding. The final two-year budget package authorized $850 million of transportation-related borrowing with $160 million backed by the state's transportation revenue program, $380 million of transportation funded GO bonds, $132 million of general fund-supported GOs, and $175 million of debt with backing still to be determined.
Gov. Scott Walker originally sought $1 billion of transportation revenue-backed debt and $330 million of transportation fund-supported GO bonding. State transportation officials previously proposed a series of tax and fee hikes to raise $750 million over the next two years to address a short-and long term funding gap but it was dropped.
Fitch Ratings, Standard & Poor's and the Kroll Bond Ratings Agency all affirmed their AA ratings of Wisconsin Friday; Moody's affirmed its Aa2 rating.
Moody's has a positive outlook; the others assign a stable outlook.
Walker recently signed a two-year $72.7 billion state budget into law before formally launching his bid for the Republican nod in the 2016 presidential contest.
"Wisconsin's fiscal house is in great shape," Walker said in a statement. "Due to our responsible budgeting, new bonding will be at the lowest level in 20 years. Moody's moved our outlook for the state's credit rating from 'stable' to `positive.' And our total outstanding state debt level has gone down."
The state's 10-year paper was trading 17 basis points over the triple-A Municipal Market Data benchmark as of Aug. 26, according to Janney Capital Markets.
The state expects to soon name a financial advisor and bond counsel for the public financing piece of a new $500 million arena for the National Basketball Association's Milwaukee Bucks.
The state is accepting qualifications from investment banking firms until Tuesday as the state works to accommodate the team's efforts to break ground this fall, Erdman said.
