Maine Bond Bank to Sell $43M

The Maine Municipal Bond Bank, which provides governmental entities in the state with access to low-cost funding, is scheduled to sell $43 million of double A-rated general obligation bonds on Tuesday.

The bonds will refund several series of outstanding bonds for an expected net present value savings of 8.2% and 4.9% of refunded principal, with no extension of maturity.

The bonds will be sold in two separate series, including $31.4 million of Series F bonds, and $11.8 million of Series G taxable bonds.

The tax-exempt bonds have maturities from 2013 through 2026 and 2034, and the taxable bonds will mature from 2013 through 2020.

Wells Fargo Securities is lead underwriter and Hawkins Delafield & Wood LLP is bond counsel.

The bonds are secured by the bond bank's full faith general obligation pledge, bonds purchased from governmental units borrowing funds from the bank, and bond payments and various accounts established under the bank's general resolution.

"We view the enterprise risk profile of the program as very strong due to a combination of the low industry risk profile for municipal pools and the program's market position, which we also consider very strong," Standard & Poor's analysts said in a report.

The agency has assigned the bonds a AA-plus rating and a stable outlook, also citing a strong financial risk profile.

Moody's Investors Service, also noting the strength of the program, assigned the bonds a Aa2 rating and a stable outlook.

"The size and diversity of the bond bank's $1 billion loan portfolio, together with the generally strong credit quality of the 291 individual borrowers and timely repayment history over nearly four decades, provide strong security to bondholders," analysts said.

Moody's also cited satisfactory debt structure and legal covenants, as well as strong monitoring and collection procedures.

Yields on the bank's bond sale last month ranged from 0.25% with a 2% coupon in 2013 to 3.45% with a 3.25% coupon in 2042.

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