Yesterday, the State of Minnesota’s $876.2 million general obligation bond sale received interest rates near historic lows. The proceeds support capital construction projects such as asset preservation, higher education facilities, highway projects, and economic and redevelopment projects previously authorized.
There was strong demand for the State’s bonds, and the low borrowing costs will benefit taxpayers as the State starts selling bonds for projects included in the historic 2020 bonding package.
“Minnesota continues to manage our debt well, saving taxpayer dollars,”said Minnesota Management and Budget Commissioner Jim Schowalter. “As a AAA-rated state, we received historically low interest rates that allow us to make smart investments in Minnesota, reduce our cost of borrowing, and nimbly respond to challenges created by the COVID-19 pandemic.
The two series of general obligation bonds sold include:
$565,150,000 General Obligation State Various Purpose Bonds, Series 2021A (1.71 percent interest)
$311,000,000 General Obligation State Trunk Highway Bonds, Series 2021B (1.49 percent interest)
Ahead of the sale, Fitch and Standard & Poor’s reaffirmed Minnesota’s AAA credit ratings and Moody’s reaffirmed the Aa1 rating reflecting the state’s diverse economy, history of strong financial results, strong governmental framework, and moderate debt levels. A state’s credit ratings play an important role in obtaining low interest rates for a bond sale. AAA is the highest credit rating awarded by the agencies.
The Series 2021A Bonds were sold in two transactions to separate bidding groups. Kutak Rock acted as bond counsel on the transaction and Public Resources Advisory Group was the state’s financial advisor for the sale.