Gilt-edged Georgia reaped record-low interest rates on last week’s sale of $653.9 million of general obligation bonds, which were issued to fund new capital projects for K-12 public schools, higher education, public safety, and infrastructure.
The offering resulted in net interest costs ranging from 0.97% to 2.14%, which translated into an annual debt-service savings of more than $15 million compared to budgeted amounts, according to Gov. Sonny Perdue.
“These strong bond ratings and low interest rates are indicative of the sound conservative fiscal management of our state, even during these difficult economic times,” he said.
The deal sold as $255.1 million of tax-exempt bonds, $233.5 million of taxable Build America Bonds with a 35% percent interest rate subsidy from the federal government, $136.5 million of recovery zone economic development bonds with 45% interest rate subsidy, and $28.8 million of qualified school construction bonds with a 100% interest rate subsidy.
State finance officials had planned to sell an additional $321 million of refunding bonds in last week’s offering, which required achieving a minimum of 4% present-value savings. However, the market moved away from the refunding target, so the deal was postponed.