LOS ANGELES - Oregon's AA-rated general obligation bonds met strong demand in the market during a $55 million offering, according to the state treasurer's department.
"This is our first state general obligation bond sale of the year, and it received a great reception from the market," Laura Lockwood McCall, director of the Treasury debt management division, said in a May 1 statement. "Our bonds were rapidly bought up by municipal debt investors at very favorable rates."
BofA Merrill Lynch priced the bonds on April 22 in two series of tax-exempt and taxable bonds.
Yields on the tax-exempt portion ranged from 0.14% with a 1% coupon in 2015 to 3.55% with a 5% coupon in 2039.
On the taxable portion, yields ranged from 0.21% in 2015 to 3.42% in 2024.
"The State Treasury is laying the groundwork for jobs and stretching public dollars further, through our judicious use of bonds and by keeping Oregon's credit ratings strong," said State Treasurer Ted Wheeler.
The bonds are rated Aa1 by Moody's Investors Service, and AA-plus by both Standard & Poor's and Fitch Ratings. All three assign stable outlooks.
The credit rating agencies cite the state's strong financial management, maintenance of a moderate Rainy Day Fund balance, and above-average pension funding ratios as credit strengths.
They also noted the state's reliance on personal and corporate income tax revenues, which fluctuate with economic cycles, as a credit challenge.
Last week's bonds were authorized by the 2013 Legislature and will finance various projects throughout the state.
About $22 million of the proceeds will be used by the Oregon Health Authority for the completion of the Junction City Hospital project, which is scheduled to open in April 2015. The psychiatric hospital was part of a larger project that broke ground in 2008.
Another $16.5 million of the proceeds will finance the first phase of rehabilitation for the 75-year-old State Capitol n Salem. The renovation project focuses on seismically stabilizing the Capitol, which suffered damage from a 1993 earthquake, and addressing life safety concerns.