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After delay, state finally able to sell revenue bonds

You wouldn’t know it by the stock market or most economic data, but apparently the revenue bond market is looking a bit better. The state of Minnesota, which had delayed a $42.2 million sale of revenue bonds last month because market conditions were so bad, has finally sold the bonds.

They’ll be used to fund a digital 800-megahertz emergency response radio system used by all agencies supporting public safety, including state, regional, local, federal, military, and tribal authorities.

It happened via a negotiated sale to an underwriting group consisting of Citi, RBC Capital Markets, Piper Jaffray & Co., and Loop Capital Markets, LLC, at a true interest cost of 4.60 percent, said Minnesota Management & Budget Commissioner Tom Hanson.

There were fewer bidders last month because of the downward trend of the market as well as the bankruptcy or mergers of key investment firms.

“This is a positive development in what has otherwise been a very negative market,” Commissioner Hanson said in his announcement today. “The bonds sold today will ensure that the cash flow for this important public safety system can continue as planned.”

He stressed that the delay never meant construction of the system was in jeopardy and noted that the account had a positive balance. But if the bond sale needed to be delayed further, the department would have had to borrow from the 911 fee revenues used to secure the bonds to cover project cash flow.

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