ANNAPOLIS (March 5, 2014)—Maryland State Treasurer Nancy K. Kopp announced that the Board of Public Works (BPW), composed of Governor Martin O’Malley, Comptroller Peter Franchot and Treasurer Kopp, completed the sale of $736,855,000 of General Obligation bonds today in three series. Competitive sales for Series A, Series B, and Series C occurred at today’s BPW meeting. The State received bids for the $450,000,000 of Tax-Exempt General Obligation Bonds (Series A), the $50,000,000 of Taxable Bonds (Series B), and the $236,855,000 of Tax-Exempt Refunding Bonds (Series C). In today’s competitive sales: $450 million in tax-exempt bonds in Series A sold at a true interest cost of 2.84%; the winning bidder was Bank of America Merrill Lynch, and the net premium was $55,962,815; $50 million of Series B taxable bonds sold at a true interest cost of 0.91%; the winning bidder was Citigroup Global Markets, and the discount was $120,000; and $236.855 million in tax-exempt refunding bonds in Series C sold at a true interest cost of 1.24%; the winning bidder was J.P. Morgan Securities LLC, and the net premium was $42,150,255.
Today’s sale of tax-exempt and taxable General Obligation bonds (Series A and Series B) achieved a combined interest rate of 2.77%. There were seven bidders on Series A, nine bidders on Series B, and seven bidders on Series C.
Treasurer Kopp commented “Today’s results were very satisfying for the taxpayers of Maryland. The demand for Maryland bonds and the resulting favorable interest rates are a reflection of the top quality of Maryland’s credit and the security of the investment it provides. The State’s taxpayers benefit from saving millions of dollars because of our strong AAA bond ratings and resultant lower interest rates. In addition, today’s successful sale of tax-exempt refunding bonds will save Maryland taxpayers $12.6 million in debt service costs. Overall, Maryland’s citizens benefit from the investment in Maryland’s schools, colleges, hospitals, prisons and cultural projects that are supported with bond proceeds.”
Maryland is one of only ten states to currently hold 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 February 19, 2014, in anticipation of this bond sale.
The Maryland State Treasurer’s Office expects to conduct another bond sale in July or August 2014.
Source: Office of Maryland State Treasurer Nancy K. Kopp