California announced Tuesday that it has closed a $199.9 million bond deal with the University of California through a private placement transaction, the fifth such placement the state treasurer’s office has conducted this year.
The university system purchased the bonds, which finance voter-approved general obligation bond projects at eight UC campuses.
Each campus will have one to three renovation and-or manufacturing requests, whether it is the construction of a new building, the expansion of a facility, or updating laboratory or visual art equipment.
State Treasurer Bill Lockyer announced that California will pay 3.183% interest on the GO bonds, which have a mandatory tender in November 2012.
The treasurer’s office developed the private-placement program to keep funds flowing to infrastructure projects while the state government copes with ongoing fiscal difficulties that have inhibited regular access to the bond markets, said Tom Dresslar, Lockyer’s spokesman.
The treasurer’s office places the bonds with organizations to keep financing flowing for state bond projects in those organizations’ jurisdictions.
“It’s just an unusual avenue we thought was appropriate to take given the ongoing fiscal difficulties facing the state and the effect it has on our ability to finance infrastructure,” Dresslar said.
Since February, the state has placed $737 million of GO bonds with various parties, including the Bay Area Toll Authority, the Los Angeles County Metropolitan Transportation Authority, the San Bernardino Associated Governments, Solano County, and now the UC system, Dresslar said.