- Andrew Napolitano
Transaction Will Produce $73 Million In Budgetary Savings Over the Next 22 Years
BOSTON — This week, the State Treasurer’s Office priced and sold $952 million of general obligation bonds in a transaction jointly managed by Bank of America Merrill Lynch and Siebert Brandford Shank & Co. The transaction consisted of two separate series of bonds. The $250 million 2015 Series C bonds will provide funds for the Commonwealth’s capital budget while the $702 million of 2015 Series A refunding bonds will refinance certain outstanding Commonwealth bonds, and save the Commonwealth more than $73 million in debt service costs over the next 22 years.
“In a difficult market environment, our sound debt management practices and long-term commitment to transparency have allowed us to lock in significant savings for the Commonwealth’s taxpayers, all while providing funding at attractive levels for our long-term infrastructure goals,” said Treasurer Deb Goldberg.
The sale began on Tuesday with an order period open solely to individual investors, with Massachusetts investors receiving priority status. The Tuesday order period generated 380 retail orders totaling $115 million from investors, both in Massachusetts and around the country. On Wednesday the sale was opened up to institutional investors, and by the close over $1 billion of orders had been submitted for the bonds.
The combined transaction priced at a True Interest Cost of 3.64% with an average life of 16.22 years. The refunding transaction produces savings of over 10% of refunded par, without extending the life of the Commonwealth’s debt profile.