BRADENTON, Fla. — Gilt-edged Georgia plans to competitively sell $741.5 million of new and refunding general obligation bonds this week.
The bulk of new-money bond proceeds will be used to improve educational facilities and continue the Port of Savannah harbor-deepening project in preparation for larger vessels following the 2014 enlargement of the Panama Canal.
On Wednesday, bids will be taken until noon Eastern Daylight Time for $141.5 million of GO refunding bonds with maturities between 2014 and 2023.
The refunding is anticipated to receive present-value savings of around $12 million, according to Lee McElhannon, director of bond finance with the Georgia State Financing and Investment Commission.
On Thursday, the state will sell $520 million of new-money GO bonds and $80 million of taxable new-money GOs. The bonds will have serial maturities between 2013 and 2033 unless bidders designate consecutive maturities into term bonds, according to bond documents.
“This is a typical new-money issue for the state … to begin or continue projects,” McElhannon said.
“We believe, and are hopeful, that the market will have a healthy appetite for Georgia’s general obligation bonds and that we will receive strong bids,” he added.
This week’s transaction is a “fairly large sum,” he said, though it is less than the nearly $1 billion deal sold a year ago, which was the state’s largest ever single-day bond offering.
McElhannon also said that this week’s deal is the last for Russell Hinton as the state auditor and secretary-treasurer of the financing commission.
Hinton, who is a member of the state’s rating agency presentation team, is retiring June 30 after 38 years in state government.
“Going forward, we will miss his knowledge, wisdom and humor,” McElhannon said.
The 2012 new-money GOs will fund a variety of capital improvements across the state, including education, libraries and various state agency projects.
The largest recipients of bond proceeds are the Board of Regents of the University System of Georgia, which will receive $330 million, and the State Board of Education, which receives $61.2 million for state, county and independent school systems.
The Georgia Ports Authority will use the third-largest amount of proceeds, $60 million, toward the $652 million Savannah harbor deepening project to prepare the port for larger ships after the Panama Canal project is done.
In April, the U.S. Army Corps of Engineers released the port’s final environmental impact statement, which included an evaluation of deepening the shipping channel to 47 feet from 42 feet. The environmental impact statement will now undergo a review process.
Georgia has another $90 million of authorized but unsold bonds for the Port of Savannah project, which will be sold as needed, McElhannon said.
As part of this week’s offering, the state is also selling $80 million of taxable bonds for various projects, some with private-use components.
The largest amount of the taxable portion, $50 million, will be used for water-supply projects.
Fitch Ratings, Moody’s Investors Service, and Standard & Poor’s on Monday assigned a triple-A rating to this week’s sale.
Public Resources Advisory Group is the state’s financial advisor, King & Spalding LLP is bond counsel and Kutak Rock LLP is disclosure counsel.
Georgia’s last trip to the bond market was in November. The largest component of that deal was $208.2 million of GOs that were sold to JPMorgan.
Bond prices ranged from 0.23% with a 2% coupon in 2012, to 2.73% with a 4% coupon in 2022, to 3.74% with a 4% coupon in 2031.