Nevada News Bureau Staff: State Treasurer Kate Marshall announced today that despite the current volatile treasury market, her office has successfully completed the sale of five series of general obligation bonds totaling $161.3 million at an average interest cost of 3.6 percent, one of the lowest interest rates the state has ever received.
“We have been working diligently to find funding to assist the Governor’s Office and the Department of Administration with meeting capital improvement project needs they have identified,” Marshall said. “I am happy to report that this important sale will provide about $52 million in funding for such projects, with the determination of how that money will be used now in the hands of the Department of Administration.”
Marshall praised her staff and the three firms managing the sale – Barclays Capital, Merrill Lynch, and Morgan Stanley – for their efforts and teamwork in making the sale a success.
The bonds were sold in two main blocks. The first two series of bonds totaling $142.1 million were sold to refinance bonds issued previously for the state’s capital improvement program. The proceeds will provide $23.1 million for new projects this fiscal year and free up an additional $29 million for fiscal year 2012.
The last three series of bonds totaling $19.2 million are providing funding for the state’s Clean Water and Safe Drinking Water Revolving Fund, used to fund local governments’ water and sewer projects throughout the state, as well as to refund bonds previously issued under that program.
The bond sales come a week after the country’s three major rating agencies maintained the state’s strong AA bond rating.
All three rating agencies – Moody’s Investors Service, Standard & Poor’s and Fitch – said the high rating reflects the state’s conservative financial practices, modest level of state debt, and strong financial leadership.
“The high ratings we were able to achieve in spite of the economic hardships facing the state over the past two years played a substantial role in our ability to sell the bonds this week amidst a heavy supply of new municipal bonds and inflationary concerns in the bond market,” Marshall said. “With yields likely to rise in the future due to the potential end of the Build America Bonds program by year-end and the current tone of the bond market, we were pleased to be able to effectively market these bonds to the investor community at this time.”