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State of Maine Attracts New Investors and Achieves Low Yields on General Obligation Bonds
June 26, 2019
Office of the Treasurer
Proceeds will fund vital infrastructure and economic development needs to benefit Maine people
Augusta, ME - State Treasurer Henry E.M. Beck, Esq. today announced a successful closing of the June 2019 sale of general obligation bonds to fund $161,070,000 of projects previously approved by Maine voters. The projects include major transportation infrastructure such as roads, bridges and passenger rail; ports, harbors and marine infrastructure; environmental protection projects; Maine Community College and University of Maine campus upgrades; research and development for infrastructure and technology upgrades; and senior housing and weatherization projects.
The underwriting syndicate was led by Raymond James and every retail broker with an office in the State was invited to participate in the selling group to provide the widest possible distribution to Maine residents. The bond sale generated $286 million in orders, including $7.28 million in retail orders.
There were 16 new institutional investors that submitted orders for tax-exempt bonds and 19 new institutional investors that submitted orders for taxable bonds. These new investors included bank trusts, municipal entities and professional money managers. "Reaching new investors and driving up demand for Maine bonds was one of our goals," said Treasurer Beck. "The more investors that want to purchase bonds, the lower the ultimate interest cost for the State." Last week's sale, which concluded on Tuesday June 11th, resulted in an All-in True Interest cost of 1.68% for the combined tax-exempt and taxable bonds. The bonds have a 10-year life and will be completely paid off on June 1, 2029.
"The people of Maine can be proud of our commitment to sound financial management. Our bond rating of 'Aa2/AA' and our reputation in the market led to the low interest rates achieved on this transaction. This result allowed us to lower the amount originally budgeted for principal and interest payments and save money for Maine taxpayers," noted Treasurer Beck.