Bond sale nets lowest rates in 20 years

ATLANTA – Governor Sonny Perdue announced today that the State of Georgia successfully sold $613,850,000 million of general obligation bonds to fund new schools, roads and other projects throughout the state.

Late last month, Moody’s Investors Service, Standard & Poor’s Ratings Service and Fitch Ratings affirmed the state’s Aaa, AAA and AAA, respectively. The triple-A ratings reflect the highest rating available to government issuers.

“Georgia's longstanding 'AAA' rating is the result of its conservative debt management, consistent maintenance of sound finances, and a diversified economy,” Fitch Ratings stated in its report.

This week’s sale was completed in a single day and largely sold to retail investors, reflecting solid demand for Georgia’s high-grade bonds. The Georgia State Financing and Investment Commission officially approved the sale and rate on Wednesday. The bonds are scheduled to settle, or close, on Thursday, February 12. The state was able to lock in a rate of 1.61 percent for the 5-year bonds – the lowest 5-year rate Georgia has secured in two decades – and a rate of 3.89 percent for the 20-year bonds – the third lowest 20-year rate in the past 20 years.

These rates translate into an annual debt service savings of $5.9 million compared to budgeted amounts, and are more favorable than the interest rates received in the state’s last bond sale in June.

“In these challenging economic times, this bond offering gave Georgians the opportunity to invest in the state while strengthening their own portfolio,” said Governor Perdue. “We are pleased with the swift sale of the bonds and competitive rates and will be even more pleased when we see the ground breaking on these projects, putting many Georgians back to work.”

Approximately 90 percent of the retail orders originated from Georgia zip codes.

Monday’s sale of bonds is part of the $1 billion in the capital outlay program approved in the state’s 2009 budget. GSFIC plans to sell the remaining authorized, but unissued, bonds later this spring, depending on market conditions.

In his 2010 budget proposal, Governor Perdue recommended an additional $1.2 billion in bond projects, which will create approximately 20,000 additional jobs.

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