Georgia Receives Record Low Interest Rates

ATLANTA – October 6, 2010 – Governor Sonny Perdue announced today that the state successfully sold $654 million in general obligation bonds to fund new K-12 schools, higher education facilities, public safety projects and other crucial infrastructure.  This week’s bond sale is a portion of the capital outlay program approved in the state’s 2011 budget and some projects that were carried over from last year into this year.

The record low interest rates received during the sale translate into an annual debt service savings of over $15 million compared to budgeted amounts.

“These strong bond ratings and low interest rates are indicative of the sound conservative fiscal management of our state, even during these difficult economic times,” said Governor Perdue. “I am proud that we are one of only a handful of states in the nation with this stellar bond rating.”

Net interest costs on the Series 2010B and 2010C Series bonds ranged from 0.97 percent for five-year tax exempt bonds to 2.14 percent for 20-year bonds – both record low rates for the state. The 2010C Series included $233.5 million in Build America Bonds which carry a 35 percent interest rate subsidy, $136.6 million in Recovery Zone Economic Development Bonds which carry a 45 percent interest rate subsidy, and $28.8 million in Qualified School Construction Bonds which carry a 100 percent interest rate subsidy.  The Qualified School Construction Bonds were part of a total of $238 million of bonds sold by the state to finance local k-12 school buildings throughout the state.

In addition, the Commission allocated $116 million in Qualified School Construction Bonds (QSCBs), to eight local school districts and $148 million in Recovery Zone Facility Bonds to local development authorities. The bond authorizations are part of the American Recovery and Reinvestment Act.

Last week, Moody’s, Fitch, and Standard & Poor’s rating agencies assigned their triple-A bond ratings with a stable outlook to the state’s General Obligation bonds.  The triple-A ratings are the highest rating available to government issuers.

###