WASHINGTON — Maryland plans to competitively sell up to $750 million of triple-A rated tax-exempt and taxable general obligation bonds on March 5, according to state officials.
The sales will include $450 million of tax-exempt bonds, $50 million of taxable bonds and up to $250 million of tax-exempt refunding bonds, said Susanne Brogan, Maryland deputy treasurer for public policy.
The bonds are expected to be sold to institutional investors. Maryland does not plan to have a retail sales period and did not have one with their GOs in 2013 due to the lack of public demand for bonds with low interest rates, Brogan said.
The proceeds of the tax-exempt bonds will be used to finance capital projects such as educational facilities and hospitals. The taxable bond proceeds will be used for revolving loan programs for housing, water quality and other projects, according to officials and the preliminary official statement.
The proceeds from the sale of the tax-exempt refunding bonds will be used to pay off bonds previously issued, but the treasurer's office is still figuring out which ones, Brogan said. The POS says that Maryland will sell $241.03 million of refunding bonds, which Brogan said is the best estimate.
All three major rating agencies have reaffirmed Maryland's triple-A rating ahead of the sale. Maryland has held that rating since 1961 from Standard and Poor's, 1973 from Moody's Investors Service and 1993 from Fitch Ratings, according to a news release from the state treasurer's office.
"We are pleased the rating analysts recognize the contribution of Maryland's diverse economy, our well-educated workforce, and above-average wealth and income levels to the overall quality of an investment in Maryland," State Treasurer Nancy Kopp said in the release.
Shortly before Maryland's sale in July, Moody's revised its outlook for the state's GO bonds to stable from negative. Fitch and Standard and Poor's also give the state a stable outlook. Moody's had previously given a negative outlook because of the state's indirect links to the federal government.
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 state treasurer's office said it expects to have another sale this summer.
Maryland had about $10.9 billion of net state tax-supported debt outstanding as of Dec. 31, including about $8.2 billion of outstanding GO debt, according to the POS.