ANNAPOLIS (October 22, 2009)—Maryland State Treasurer Nancy K. Kopp announced that the Maryland Board of Public Works (BPW), comprising Governor Martin O’Malley, Comptroller Peter Franchot and Treasurer Kopp, completed the successful sale of $200 million of General Obligation bonds on Wednesday.
The sale, which included $141,800,000 in tax-exempt bonds and $58,200,000 in Build America Bonds, sold at interest rates of 2.846 percent and 3.057 percent, respectively. The winning bidder for the $141,800,000 in tax-exempt bonds was J.P. Morgan Securities, Inc., while the winning bidder for the Build America bonds was Barclays Capital, Inc.
The overall True Interest Cost (TIC) for both bond sales was 2.93 percent, the lowest in at least 20 years and even lower than the previous low of 3.08 percent in the August 2009 bond sale. “Today’s overall low rate illustrates not only the intrinsic value of our Triple AAA rating but also that investors see Maryland as an exceptional, safe and prudent investment,” Treasurer Kopp said.
The BABS, which were authorized by the American Recovery and Reinvestment Act, are taxable bonds for which the U.S. Treasury will pay 35 percent of the interest to the State. They offer financial advantages to issuers in the longer maturities, explaining why the State is issuing them only in the 2022, 2023 and 2024 maturities. The State received a savings of about $2.2 million.
Source: Maryland State Treasurer’s Office