Successful Maine Bond Sale
June 6, 2011
Maine State Treasurer Bruce Poliquin confirmed the successful sale of $108,135,000 of Maine general obligation bonds on Thursday, June 2nd. This was the first time since 1990 that such a sale was conducted on a competitive basis.
11 national and regional investment companies competed to buy the $39,635,000 Series A federally taxable securities maturing in 1-3 years, with BMO Capital Markets Corporation being the successful bidder at a total interest cost of 0.918423%. 12 national and regional firms competed to buy the $68,500,000 Series B tax-exempt securities maturing in 1-10 years, with J.P. Morgan Securities casting the winning bid at a total interest cost of 2.053444%.
The $108 million of bond proceeds will be used to fund highway and railway construction, research and development, and other capital projects, all approved by Maine voters over the past few years.
"I'm extremely pleased with the success of this competitive bond sale," said Treasurer Poliquin. "We were able to sell a high-quality investment at the lowest cost possible for the Maine taxpayers in a completely transparent process."
National rating agencies Standard and Poor's and Moody's both held steady their credit assessment of Maine state government within the past two weeks. The S&P rating on the general obligation bonds is AA, negative outlook. The Moody's rating is AA2, stable outlook. The rating agencies cited the state's ability to borrow from its broad internal cash pool as a positive strategy to avoid borrowing externally to fund current operations. They also noted the new Administration's commitment to replenish its Budget Stabilization Fund to help smooth the budgetary impacts of future economic downturns.
Treasurer Poliquin further commented "Maintaining the State's bond ratings added to the success of the competitive bond sale, and minimized interest rate payments to bondholders by Maine taxpayers. This is a very good day for the hard-working people of Maine."
Treasurer Poliquin and the new LePage Administration are committed to creating a business-friendly environment by state government spending less, taxing less, regulating less, and borrowing less. Their goal of helping to build long-term prosperity for Maine citizens is centered on reducing the high cost and complexity of doing business in Maine. This, in turn, will help attract capital investment and private sector jobs for Maine workers.