BRADENTON, Fla. - The Tennessee State School Bond Authority claimed $12.9 million in savings after closing on a bond offering that also finances construction projects at Tennessee colleges and universities.

The $464 million new money and refunding deal closed May 7.

"The TSSBA was able to take advantage of its strong credit rating and favorable market conditions to refinance outstanding bonds with lower interest rates," state officials said.

The bonds were rated AA-plus by Fitch Ratings, Aa1 by Moody's Investors Service, and AA by Standard & Poor's.

The deal was structured as $75 million of Series A taxable bonds that sold at a true interest cost of 2.85%. The transaction included $31 million in new money and $44 million in refunding bonds that resulted in savings of $3.5 million.

The $389 million of Series B tax-exempt bonds told at a true interest cost of 3.39%. The bonds included a $134 million refunding component that resulted in $9.4 million in savings.

The tax-exempt tranche priced to yield 1.07% for $5.3 million of bonds maturing in 2018, 2.12% for $15.5 million of bonds in 2024, and 3.13% on a $61.9 million term bond in 2040. All sold with 5% coupons.

Citi was the book-runner, while other underwriters were JPMorgan, SunTrust Robinson, and Wells Fargo Securities.

"I am delighted by the closing of [the] bond sale," said Comptroller Justin Wilson. "This allows Tennessee's higher education institutions to not only move forward with important projects, but once again, it has resulted in a substantial savings."

Public Financial Management Inc. is the TSSBA's financial advisor.

Hawkins Delafield & Wood LLP was bond counsel. Bass Berry & Sims PLC was counsel to the underwriters.

The School Board Authority last issued $344.6 million of bonds in August 2014.

The largest tranche of that offering was $212.2 million of tax exempt bonds. Pricing ranged from $16.2 million to yield 1.35% in 2019, $11.8 million to yield 2.68% in 2027, and $3.9 million to yield 3.29% in 2037. All had 5% coupons.

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