Yesterday, the State of Tennessee sold $449,070,000 of General Obligation Refunding Bonds. The goal of this refinancing was to achieve debt service savings over the life of the debt equal to 4% of the present value of the refunded bonds. The State surpassed this goal, achieving 7.46% present value savings totaling $34,031,900. The savings were realized proportionally over the life of the refinanced debt.
With this refinancing, the total savings generated this fiscal year are $37,319,500 (including the refinancing that was sold last fall that generated $3,287,600.)
Some highlights about this sale are:
- The bonds were rated Aaa, AA+, AAA by Moody’s Investors Service, Standard and Poor’s and Fitch respectively.
- The bond issue was the third largest deal this week in the nation and the largest General Obligation Bond financing calendared for this week.
- The bonds were sold at a negotiated sale led by JP Morgan Securities. Two additional firms with public finance offices in Tennessee participated as co-managers. Six firms with public finance offices in Tennessee participated in the Selling Group.
- Over $100,000,000 in orders were taken from retail customers with Tennessee retail customers receiving the highest priority.
- In several maturities our bonds were in such demand that the yield on the bonds was reduced prior to accepting the pricing
- The savings will occur in fiscal years 2015 – 2027.
Distributed by: House Majority Leader Gerald McCormick and Senate Majority Leader Mark Norris