"This bond sale is extraordinary by any measure," said Tennessee Comptroller Justin Wilson.

BRADENTON, Fla. – Tennessee generated some of the lowest interest rates in its history during a recent general obligation offering, according to state officials.

The state priced the $384 million of GOs on Oct. 27, and closed the loan on Nov. 18.

The deal received nearly $2 billion in orders.

"This high demand allowed the state to reprice most of the maturities on its GO bonds 5 to 10 basis points lower than the price that was initially offered," officials said. "Investors were willing to pay a $68.5 million up-front premium to acquire Tennessee's bonds."

The transaction sold in two series as $286.3 million in tax-exempt new-money bonds and $97.5 million in refunding bonds. The combined true interest cost was 2.63%.

The refunding saved $8.9 million or 8.56%, which was higher than pre-sale savings estimates of $7.6 million or 7.33%.

"This bond sale is extraordinary by any measure," Comptroller Justin P. Wilson said in a release. "This historic sale proves that a well-managed state allows taxpayers to save money."

The bonds are rated AAA by Fitch Ratings and Aaa by Moody's Investors Service, both with stable outlooks.

Standard & Poor's changed the state's outlook to positive from stable while rating the bonds AA-plus, saying that it expects to raise the rating in the next 12 to 18 months based on continued improvement to the state's financial position.

Tennessee's 20-year new money bonds priced at tight spreads to the benchmark triple-A scale.

Bonds maturing in 2020 priced with a 5% coupon to yield 1.12%, which was 4 basis points under the scale.

In the 2035 final maturity, bonds priced with a 5% coupon to yield 2.8% or 1 basis point over the benchmark.

Morgan Stanley & Co. served as book-runner on the deal. Co-managers were Bank of America Merrill Lynch, Piper Jaffray, and Raymond James & Associates Inc.

Public Financial Management Inc., is the state's financial advisor.

Hawkins Delafield & Wood LLP is bond counsel. Bass Berry & Sims PLC is underwriters' counsel.

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