New Hampshire tomorrow will refund all $60 million of its auction-rate debt as well as issue $30 million of new-money general obligation bonds. The entire issuance is tax-exempt.
Public Resources Advisory Group is the financial adviser for the deal, and Edwards Angell Palmer & Dodge LLP is bond counsel.
The $60 million refunding will refinance the state's auction-rate GO debt to a fixed rate. While no auctions have failed yet for New Hampshire's two $30 million auction-rate securities series - which were issued in 2004 for capital projects - its rates, which are reset every week, had jumped up to 6% in mid-February after having averaged a little over 3% for eight weeks prior to that. Its fail rate is 12%. Financial Security Assurance Inc. insures both of New Hampshire's $30 million auction-rate series.
The $30 million of new money will be used for highway-related projects. The state's current biennium budget allows for $60 million of GO bonds to be issued for various transportation infrastructure programs, including municipal bridge aid, state match on federally funded highway projects, and state aid to local highway projects. Debt service payments on the bonds authorized will be paid from the state's highway fund, according to the preliminary official statement.
New Hampshire plans to issue the remaining $30 million for road and bridge repair projects in either December or January. This is the largest issuance in more than a decade for highway-specific projects in the state, according to officials.
New Hampshire generally does not insure its GO debt and has no plans to insure the bonds, though it will be the option of the bidder. Moody's Investors Service rates the states outstanding GO debt as Aa2, while Fitch Ratings and Standard & Poor's rate it AA.
The final maturity of the $60 million GO refunding bonds is 2025, while the final maturity of the $30 million new-money GO bonds is 2028, according to the POS.
As of June 30, 2007, New Hampshire has $654 million of outstanding GO debt.
