Maine poised for first GO sale under new governor

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Maine will test the municipal bond market for the first time since the arrival of a new governor who has reversed her predecessor's animosity toward bonds.

The state is slated to sell $161.1 million of general obligation bonds in a negotiated transaction next week that will finance highway and bridge projects along with other various capital needs. It will make Maine’s first bond transaction since July when the state was forced to re-issue $96.03 million of Series 2018D GOs priced by Wells Fargo a month after then- Gov. Paul LePage intervened to block the original transaction after it priced.

Municipal Market Analytics partner Matt Fabian said the tightening of municipal bond spreads since Maine last went to market 11 months ago will have a bigger impact on next week’s pricing than the new face in the governor's office. Fabian said, however, that Mills' more traditional approach to governance should put investors more at ease when considering whether to buy Maine paper.

“Analysts are looking for predictability as much as they are the state’s ability to pay,” Fabian said. “Having a less politically divisive governor is important for the state’s credit quality and should result in better prices.”

The Maine deal next week will feature $35.8 million of federally taxable series A GO bonds and $125.3 million of series B bonds. The bonds, which have a 10-year final maturity, are rated AA by S&P Global Ratings and Aa2 by Moody’s Investors Service. They are scheduled to be offered starting in a retail order period Monday.

Raymond James and Goldman Sachs are lead managers on the sale. J.P. Morgan and Siebert Cisneros Shank & Co. are co-managers. Hilltop Securities is municipal advisor on the transaction with Locke Lord assisting as bond counsel.

In advance GO sale, Maine launched a new disclosure initiative to connect with investrs. initiative to boost investors for its municipal bond offerings. Its new investor relations website provides a single location with information on Maine’s credit fundamentals.

"It’s our fiduciary responsibility to raise capital at the lowest possible cost and our strategic approach to investor relations will help further differentiate us from other issuers in the marketplace," Maine State Treasurer Henry Beck said in a statement.

The new platform is supplied by Boston-based BondLink. Since launching its first investor platform two years ago, BondLink has expanded its network across more than 25 states, the District of Columbia and the U.S. Virgin Islands.

Maine is gearing up for next week’s GO transaction as Mills pitches a new $239 million bond proposal to state lawmakers aimed at tackling capital projects, expanding broadband service and improving workforce development.

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Primary bond market Janet Mills State of Maine Maine