New Hampshire today will sell $150 million of general obligation new-money debt that will help support highway projects and infrastructure improvements throughout the state.
The deal is larger than New Hampshire's typical annual GO offerings, which tend to range between $75 million and $100 million. This year, state officials tagged on additional borrowing for highway transportation needs. In the past, New Hampshire would finance Department of Transportation infrastructure projects on a pay-as-you-go basis, according to state Treasurer Catherine Provencher.
"We do have some highway fund money in this issue and our capital spending has just been a little higher than it has been historically," Provencher said. "So, it is all new money."
While highway funds from state and federal sources will pay off $30 million of the overall sale, all of the bonds carry the state's full faith and credit.
Merrill Lynch & Co. will lead a syndicate of bankers on the deal and Citi and Wachovia Bank NA will serve as co-senior managers. Edwards, Angell, Palmer & Dodge LLP is bond counsel. Public Resources Advisory Group is the financial adviser. The debt will not be insured.
Fitch Ratings and Moody's Investors Service rate the transaction AA and Aa2, respectively. Standard & Poor's rates the credit AA. The state has roughly $689 million of outstanding GO debt.
The Series 2008C bonds will offer fixed-rate serial maturities from 2010 through 2028. Principal payments will total $9 million per year from 2010 through 2021 and decrease to $6 million annually for the remaining years, according to the preliminary official statement.
Bond proceeds will help finance $30 million of road and bridge projects, about $17.5 million of capital improvements throughout the state's university system, and remaining funds will support court house construction projects and various upgrade and renovation plans.
Currently, state officials are working on addressing an estimated $250 million shortfall in the current $1.5 billion general fund for fiscal 2009. The deficit is due to under-performing revenues, Provencher said.
"There have already been mechanisms and things put in place to address $100 million of that and we are literally in the middle of shoring up the rest of it right now," she said.
