In a preliminary report on Florida’s debt capacity, the Division of Bond Finance said that the state’s outstanding debt decreased by $500 million in 2011 and $1.5 billion in 2012.

The decline in new-money issuance reflected the first year over year decrease in two decades, and was due to lower borrowing for education and environmental programs, according to the debt report.

The state averaged $2.2 billion of bond issuance a year between 2002 through 2010.

Since 2010, the state has undertaken a significant amount of refundings to take advantage of historically low interest rates, the report said.

In 72 transactions the past three years, Florida has refunded about $6.9 billion of bonds generating $1.1 billion of gross debt-service savings, said Ben Watkins, director of bond finance.

The final debt affordability study will be released in December, and will use a state-imposed formula to calculate how much bond-issuance capacity will be available in the next fiscal year and beyond.

Watkins said his office is considering another $800 million to $1 billion in additional refundings, most of which will come to market before the end of the fiscal year.

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