When Rhode Island sold $169 million of general obligation bonds on Wednesday after a two-day retail period, two words echoed amid huge jumps in yield: Central Falls.

With the 19,000-population city in Chapter 9 and two communities and two conduit issuers having received downgrades since its Aug. 1 filing, the state sold the bonds under a marketing push called "Invest RI," in which Rhode Islanders got first crack at the bonds.

"Today's markets were challenging, with many investors waiting to see whether recent low rates will increase," state Treasurer Gina Raimondo said after the sale.

"We are very pleased to have accomplished the sale at a true interest cost of 3.81% with strong retail support and an excellent refunding result of 8.5% present-value savings," she said.

The state spent $35,000 on advertising promoting the bonds.

Pricing finalized at yields 50 to 75 basis points above the triple-A scale. Rhode Island's GO bonds are rated Aa2 by Moody's Investors Service and an equivalent AA by Standard & Poor's and Fitch Ratings.

The issue involved $145 million of consolidated capital development loan bonds, Series A, and $23.7 million of Series B. JPMorgan is the senior managing underwriter and Barclays Capital is senior co-manager.

The jumps in yield at repricing on Wednesday included a leap of 34 basis points in the 10-year range.

"It looked like they repriced 20 times there," one New York trader said. "It's not that health and hospital or state-of type of stuff that Rhode Island typically churns out, which means this one's a lot better than those others. You have to pick your battles in each state, and this would be one where if you did venture into Rhode Island you'd be buying. Even Michigan has some great bonds out there."

The trader suggested that the Ocean State's negative portrayal in the media hasn't helped its cause, adding that Rhode Island "is not doing that hot."

After it filed for bankruptcy, East Providence and West Warwick received downgrades, as did two conduit issuers: the Rhode Island Economic Development Corp. and the Rhode Island Health and Educational Building Corp.

Meanwhile, Frank Ciccone 3d, D-Providence, chairman of the state Senate's government oversight committee, is considering a full investigation into the practices of Central Falls' school district, which has been entirely state-funded since 1991.

The schools face a $1.7 million deficit. Superintendent Frances Gallo this week imposed new terms on teachers after contract talks had stalled.

"Our most recent review of several state-funded entities includes the Central Falls School District and as a result we have identified a few questions and the need for some additional information from the administration," according to Ciccone.

A June report about school reform, Ciccone said, "raises several questions regarding the school's progress" in the first year of a transformation plan.

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