Rhode Island priced a $162 million general obligation bond refinancing on Oct. 16.
The final net present value savings was $16.17 million, a 9.28% savings, according to the office of General Treasurer Gina Raimondo.
The refunding takes out $174 million of existing debt. According to Raimondo, the bonds sold at an interest cost of 2.29%, compared with 4.95% on the prior bonds, which Rhode Island issued from 2006 through 2008 to fund various projects statewide. The bonds mature in 2027.
Rhode Island also sold $46 million in new money bonds for a variety of projects that voters had approved over the years, including transportation, environmental management, higher education, clean water programs, affordable housing and the Veterans Home.
The three major bond rating agencies affirmed their ratings, and Moody's Investors Service revised its outlook to stable from negative. Moody's rates the GOs Aa2, while Standard & Poor's and Fitch Ratings each assign them AA ratings.
"The rating agencies recognize our steps toward providing for the continued stability and predictability of the retirement system," said Raimondo, a Democrat who will face Republican and Cranston Mayor Allan Fung in the November election for governor.
Raimondo, early in her term, championed a statewide pension overhaul law that five-public sector unions are challenging in court. The 2011 measure created a hybrid defined benefit-defined contribution system, suspended automatic cost-of-living increases and tweaked eligibility requirements. A compromise offer announced in February failed to clear all five unions and a trial could begin later this fall.
Fung negotiated a compromise to Cranston's pension plan, under which the city. stands to contribute $6 million less to the police and fire pension plan than otherwise in fiscal 2014.