Rhode Island saved more than $7 million by refinancing $122.9 million of debt, General Treasurer Gina Raimondo said after Monday’s bond issue.

The refinancing took debt with interest rates ranging from 4% to 5% and replaced it with new debt sold at rates below 2.5% on average.

The existing debt supports infrastructure and clean water projects, among other state programs.

It was Rhode Island’s first bond offering this year and its first since it passed the Rhode Island Retirement Security Act, a pension overhaul measure, in November.

As part of the bond issue, the state also restructured $20 million of Department of Transportation debt paid from the motor vehicle tax.

“Our strong showing in the bond market this week is an indication that Rhode Island is moving in the right direction,” Raimondo said. “This successful refinancing is good for our taxpayers.”

Janney Montgomery Scott was lead underwriter. Edwards Wildman Palmer LLP, formerly Edwards Angell Palmer & Dodge LLP, was bond counsel.

In final pricing, yields ranged from 0.83% with 3% and 5% coupons in a split 2015 maturity to 3.18% with a 3.125% coupon in 2027.

Bonds maturing in 2023 to 2027 are callable at par in 2022.

The bond issue priced at rates more favorable in comparison to national indices than the state’s last issue, which sold in August 2011, according to Maureen Gurghigian, managing director of Lincoln, R.I.-based First Southwest Co., the state’s financial advisor.

“This evidences stronger investor confidence in the state’s credit quality and enhanced the state’s savings on this refinancing,” she said. “It is also important to note that this successful offering is proof that investors are recognizing the state’s positive work on pension reform.”

All three rating agencies affirmed the state’s ratings in connection with the sale. Moody’s Investors Service rated the bonds Aa2, while Standard & Poor’s and Fitch Ratings each assigned AA ratings.

The rating reports praised Rhode Island for its pension overhaul at the state level.

Also in 2011, Rhode Island improved the disclosure of its financial information for its bond offerings, including the launch of an investor relations Web portal, a one-stop clearinghouse for many of the state’s pertinent financial information.

The Securities and Exchange Commission in February 2011 opened an investigation into bond deals in the Ocean State, Raimondo acknowledged at the time.

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