ANNAPOLIS (June 8, 2016)—Maryland State Treasurer Nancy K. Kopp announced that the Board of Public Works (BPW), composed of Governor Larry Hogan, Comptroller Peter Franchot and Treasurer Kopp, today completed the sale of $1,036,000,000 of General Obligation bonds.
In today's competitive sale of the State and Local Facilities Loan of 2016, First Series, $1.036 billion in tax-exempt bonds sold in one series at a true interest cost of 2.17%; the winning bidder was Bank of America Merrill Lynch; and the net premium was $176,269,244.
There were four bidders for the First Series Bonds.
Treasurer Kopp commented "This was a great bond sale for Maryland. Conditions in the global capital market contributed to a very favorable yield on our 15-year debt, resulting in Maryland receiving the lowest rate since August 2012. Today's sale is truly a win-win situation. Maryland's taxpayers benefit from the low interest rates associated with a very competitive sale of a triple AAA-rated instrument while investors take advantage of a high-quality, safe place to invest their money."
Proceeds from the bond sale provide funding for the State's investment in its infrastructure, with at least 60% of the proceeds supporting schools, colleges, and universities.
Maryland is one of only ten states* currently holding the AAA rating, the highest possible rating, from all three major bond rating agencies. The AAA was affirmed by Fitch, Moody's, and Standard & Poor's as recently as May 25, 2016, in anticipation of this bond sale. The most current ratings reports are available on the Treasurer's website.
This sale is the first and only bond sale of 2016. The Maryland State Treasurer's Office expects to conduct another bond sale in February or March 2017.
* The other nine states with AAA ratings from all three rating agencies are Delaware, Georgia, Iowa, Missouri, North Carolina, Tennessee, Texas, Utah, and Virginia.