Gilt-edged Georgia has refinanced approximately $658 million of its outstanding general obligation bonds at lower interest rates that will save the state more than $35 million of debt service, including $18.3 million in the state’s current fiscal year, Gov. Sonny Perdue announced.

The triple-A rated refunding bonds were sold competitively Nov. 23 to Citi at a true interest cost of 2.86%, according to Thomson Municipal Market Monitor. The refunding bonds mature between 2016 and 2022 but are callable in 2019 at par. The bonds being refunded were originally sold between 2000 and 2007 with interest rates of 4% to 6%.

Perdue also noted that the state auditor recently wrapped up work on fiscal 2009 agency audits and identified another $54 million in lapsed funds that will be returned to the state’s rainy-day fund.

Any unspent funds left over in agency accounts at the end of the fiscal year are deposited into the rainy-day fund, currently at $103 million.

“For every dollar that is saved, that is less that has to be cut from an already-lean state budget,” Perdue said, commending state auditors and the Georgia State Financing and Investment Commission for being proactive in refinancing outstanding debt when interest rates are favorable.

In a negotiated sale Nov. 4, the state sold approximately $794 million of GOs to fund new schools, public safety projects, road projects, and other infrastructure. The state locked in a rate of 1.49% for the five-year new-money bonds, and 2.99% for a portion sold as 20-year bonds. Both rates were historic lows, Perdue said.

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