Pension overhaul boosted investor confidence in Rhode Island, contends General Treasurer Gina Raimondo, who cited positives in the state's two bond offerings in 2012.

In her state of the treasury report, released late Monday, Raimondo, a leading advocate of the pension overhaul, touted a $123 million bond refinancing that saved Rhode Island more than $7 million, and an $81.4 million general obligation bond sale priced at the lowest cost of capital for the state ever.

The GO offering, she said, generated $200 million of demand and its low cost will make infrastructure investments more affordable.

"This demand lowered the cost to taxpayers as work begins to complete vital projects such as road and school construction as well as open space and watershed acquisition and protection, among others," Raimondo said.

Rhode Island expects to save $4 billion over 20 years through pension overhaul, although five public-employee unions are challenging the Rhode Island Retirement Security Act of 2011. Late last month, Judge Sarah Taft-Carter of Rhode Island Superior Court referred the case to the Federal Mediation and Conciliation Service.

Raimondo, while campaigning for the law, said pension expenses were exceeding revenues.

A report last month from state auditor general Dennis Hoyle said the pension system's net assets decreased by $204 million over one year, to $7.3 billion as of June 30, 2012.

Rhode Island's law, which took effect July 1, created a hybrid plan merging conventional public defined-benefit pension plans with 401(k)-style plans. It also included a suspension of cost-of-living adjustment increases for retirees and raises the retirement age for employees not yet eligible for retirement.

"Rhode Island has gone a long way in reducing its overall pension costs and they have greater confidence in the state's ability to meets its obligations. … It is definitely a credit positive," Barclays managing director Paul Hayley said, as quoted in Raimondo's report.

Fitch Ratings and Standard & Poor's rate Rhode Island's general obligation bonds AA, while Moody's Investor Service assigns an equivalent Aa2 rating.

Raimondo also Rhode Island will save about $450,000 annually in rent and parking by moving to a state-owned building and roughly $300,000 annually from changing the pension fund's custodial banking.

She said further initiatives include expanding discussion about balancing risk and reward, seeking investments that generate returns and minimize risk, and exploring the development of a corporate governance policy.

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