The state of Minnesota sold nearly $800 million in bonds Tuesday for capital construction projects at what’s being called a good interest rate for taxpayers, even though the rating agencies have downgraded the state’s credit.
About $445 million of the sale went for 20-year general obligation bonds, which had an interest rate of 2.82 percent, says MPR.
The sale also included $320 million in trunk highway bonds and $4 million in taxable bonds, state officials said. Because of the market conditions, the state did not take bids on refunding a proposed $152 million in bonds, because a sale would have caused larger premiums and possible tax implications, said a state statement.
The MPR story quotes Paul Rebholz with Wells Fargo’s public finance division in Minneapolis:
“That’s a phenomenal rate. Even though it’s a busy week with a lot of other issuers in the market with bonds this week, the state still did very well.”
And Kristin Hanson, assistant commissioner for treasury and debt management at Minnesota’s Management and Budget Office, said:
“The bond sale went extremely well. The market is particularly favorable at the current time, so we are pleased with the bids we received.”
Jim Schowalter, commissioner of Minnesota’s Management and Budget Office, couldn’t say how much extra interest the state will pay because of the downgrades, but he didn’t dispute an estimate by a local bond buyer that it will be about $1.25 million, the story said.