Delaware to Issue $85.5 Million in Tax-Exempt GOs

WASHINGTON – The state of Delaware will issue $85.5 million of tax-exempt general obligation refunding bonds Thursday, according to an event notice posted on the Municipal Securities Rulemaking Board's EMMA website this week.

The state will use the net proceeds of the 2016 bonds to fund to maturity or advance refund a portion of Delaware's outstanding GO bonds dating back to 2011. The state will also use a portion of the bond proceeds to purchase Treasury Obligations, State and Local Government Series, to provide for the funds to maturity or refunding of the previously issued refunded bonds, according to the official statement for the issue.

This month's issue will refund $43.5 million of outstanding Series 2011 GOs, $15.4 million of Series 2013B GOs and $30 million of Series 2014 GOs.

The Series 2016D bonds are expected to be available through The Depository Trust Company for delivery in New York City on Thursday, according to the bonds' June 22 OS. The Series 2016D bonds were underwritten by Merrill Lynch, Pierce, Fenner & Smith and J.P. Morgan Securities LLC. Saul Ewing LLP in Wilmington, Del. served as bond counsel, and Public Financial Management, Inc. was financial advisor for the issue.

The state's general obligation bonds were given a triple-A rating by Moody's Investors Service, S&P Global Ratings and Fitch Ratings. Moody's, which also gave the bonds a stable outlook, attributed the strong rating to Delaware's "prudent structural governance features" that it said would keep the state well-positioned for future economic cycles.

"Delaware's very strong financial management characteristics and history of maintaining ample budgetary reserves through recent economic cycles support the Aaa rating assigned to the state's general obligation bonds," Moody's officials said in a release from June 9.

Delaware is one of nine states to receive a triple-A rating from the three rating agencies; the others are Maryland, Virginia, Georgia, Iowa, Missouri, North Carolina, Texas and Utah.

The $275.4 million in Series 2011 bonds and $225 million in Series 2013B bonds were used for various capital projects as well as to refund outstanding GO bonds, while the Series 2014 GOs were used to fund state capital projects.

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