Treasurer Lemoine Reports 2008 Bond Sale as “Exceptionally Strong.”
May 23, 2008
(AUGUSTA)- State Treasurer Dave Lemoine confirmed today the exceptionally strong results of Maine’s most recent general obligation bond sale. “Our 2008 sale expanded upon the well-established trend of extraordinary support from Maine investors,” reported Lemoine. “More than $92 million of the $94.255 million of bonds eligible for retail sale were sold to Maine investors.” he added. The remaining bonds were sold to the institutional market.
“It’s hard to argue with these market results,” noted Lemoine. “Maine investors clearly appreciate the ability to invest in-state with security and value and, as a group, have committed a very sizable amount of personal resources to those ends.”
The bond sale raised proceeds of $108,492,018 at a true interest cost blended rate of 3.42%. The total interest cost for the tax-exempt bonds was 3.35% and 4.69% for the taxable bonds, and the total debt service payments over the 10-year term of the bonds will be $128,602,059 with an average annual debt service cost of $12,910,413. The true interest cost for tax-exempt bonds were lower than in 2007 by 56 basis points. Similarly, the true interest cost for the taxable portion of the 2008 sale was lower by 66 basis points.
Sales tracked the Municipal Market Data (MMD) rates more closely than other State General Obligation transactions in the market at the time. Also, the 2008 transaction did not use bond insurance. Treasurer Lemoine remains active in a multi-state effort to change the current use of unique municipal ratings scales that obscure the nearly non-existent risk of loss posed by state-issued bonds while creating an artificial need for bond insurance.
The 2008 bonds were available to buyers on May 16 and May 19. Formal closing of the transaction is scheduled for May 29th, 2008. The proceeds will be used to repay bond anticipation notes issued and bond-project expenses incurred in the 2008 fiscal year. Those funds were used to finance capital improvements within Maine.