DALLAS — Colorado will cover its cash-flow needs next week with the sale of $600 million of tax and revenue anticipation notes.
On Monday, the state will price competitively $100 million of education loan program notes with RBC Capital Markets as financial adviser.
The state is tentatively scheduled later next week to issue $500 million of notes for programs and agencies covered by the general fund.
In the last five years, Colorado Trans have ranged from $350 million to $650 million, with $500 million borrowed last year.
Proceeds will cover cash flow for the fiscal year that began July 1.
The notes carry top ratings of MIG1 from Moody's Investors Service and SP1-plus from Standard & Poor's.
"The highest-quality note rating is based on the state's projected cash flows and an ample cash cushion from available borrowable resources from funds outside the general fund," noted Moody's analyst Marcia Van Wagner.
The $100 million of educational Trans will fund the state's fiscal 2012 interest-free cash-flow loan program for local school districts and reduce the separately secured state general fund Trans.
The state expects the notes to fund 23 school districts in fiscal 2012.
The two largest school district borrowers in the program will be Denver Public Schools and the Boulder Valley School District, according to state officials.
Like other states in the Rocky Mountain region, Colorado is making a gradual recovery from the deep recession that lowered revenues for all forms of government.
After declining nearly 14% in fiscal 2009 and 4% in fiscal 2010, the state government projects 10.6% general fund revenue growth in the recently completed fiscal 2011.
Collections of the general fund's main revenue sources — sales and use taxes and the individual income tax — have grown significantly, according to analysts.
State officials estimate 13% growth in the individual income tax and 10.7% growth in the sales and use taxes for fiscal 2011.
"The momentum is not expected to carry into fiscal 2012," Moody's reported. "Based on expectations for a tepid recovery, the state projects that net general fund revenue will remain at its 2011 revenue. The stock market rebound that fueled capital gains-related tax collections is not expected to repeat, and continued weakness in the housing sector and labor market will suppress growth in consumer spending and sales tax collections."