Maryland plans to sell a total of $475 million of triple-A rated tax-exempt and taxable general obligation bonds in separate competitive sales on July 24, state officials said this week.
The sales will include $435 million of tax-exempt bonds and $40 million of taxable bonds.
The bonds are expected to be sold to institutional investors.
Maryland isn’t having a retail period with this sale and didn’t have one in the state’s previous sale in March because the demand in the retail sector has declined over time due to low interest rates, said Susanne Brogan, Maryland deputy treasurer for public policy.
The proceeds from the tax-exempt bond sale to be used for projects in Maryland’s capital budget, such as educational facilities and hospitals. The taxable bond proceeds will be used to finance loan programs of Maryland’s Department of Housing and Community Development and Department of the Environment, Brogan said.
All three major credit ratings agencies have reaffirmed Maryland’s triple-A rating ahead of the sale. Fitch Ratings and Standard and Poor’s give the bonds a stable outlook, but Moody’s Investors Service gives them a negative outlook because of its indirect links to the federal government.
“In light of international economic uncertainties and the evolving impacts of sequestration on the national economic recovery, we are pleased the rating analysts recognize Maryland’s strong, stable and prudent financial management,” Maryland State Treasurer Nancy Kopp said in the release.
The Maryland Board of Public Works — which consists of Kopp, Governor Martin O’Malley, and Comptroller Peter Franchot — will oversee the sale in the Goldstein Treasury Building in Annapolis.
Maryland typically has GO bond sales twice a year: in February or March and July or August. The treasurer’s office anticipates another bond sale in February or March of 2014.
The preliminary official statement for the sale lists the state’s outstanding tax-supported debt as about $11.2 billion, Brogan said.