Connecticut's $400 million general obligation bond sale generated $152.4 million in retail orders, which Treasurer Denise Nappier called the highest for a GO offering in more than four years.
Proceeds from the March 13 pricing will fund capital projects. The sale is scheduled to close March 26.
The $400 million sale involved two structures: $353 million of fixed-rate bonds with maturities between 2015 and 2034, and $47 million of variable-rate bonds that pay interest at fixed spreads to the Securities Industry and Financial Markets Association index with maturities between 2017 and 2023.
Bank of America Merrill Lynch was the lead manager.
Roughly $250 million will help fund local school construction projects statewide, $100 million will support the Jackson Labs Project, $22 million will pay for various economic development grants, and the balance will go to state facilities.
According to Nappier, the $100 million of funding for Jackson Labs is for loans to the project called for the state to use State a special "501(c)(3)" type of financing to enable tax exemption.
The total interest cost was 3.45% on the fixed-rate bonds was 3.45% and 0.82% on the variable-rate, based on the latest SIFMA Index. The combined total interest cost on the entire $400 million structure was 3.28%, based on the index.
Connecticut is among several states to covet retail investors. Massachusetts on March 17 launched a rolling program that will offer tax-exempt general obligation bonds to retail investors the last two weeks of every month. California recently sold $1.1 billion in retail, which accounted for 62% of its $1.8 billion GO sale.
"The brisk pace of retail orders supports our belief in the solid value of our state bonds," said Nappier. "By giving individual investors priority during the retail order period, we provide them a compelling opportunity to generate tax-exempt investment income."
Moody's Investors Service rates the bonds Aa3. Fitch Ratings, Standard & Poor's and Kroll Bond Rating agency rate them AA.
