Treasurer Folwell Announces $600 Million Bond Sale "AAA" Bond Rating Saves Taxpayers Millions
(Raleigh, N.C.) – State Treasurer Dale R. Folwell, CPA, through the State and Local Government Finance Division, announced today the issuance of $600 million of voter-approved General Obligation Public Improvement (Connect NC) Bonds. The sale is the third of $2 billion approved in 2016 for universities, community colleges, local parks, infrastructure improvement and other projects. The total amount of interest to be paid over the life of the Bonds is approximately $212 million. The prior issuances of $200 million and $400 million occurred in 2016 & 2018 respectively.
The bonds were purchased by Bank of America Merrill Lynch at a true interest cost of 1.9885 percent. This was the lowest rate of the 5 bids that were received.
Recently, all three major national bond rating agencies re-affirmed the state's “AAA" bond rating, noting the state's strong economy, growing reserves and conservative fiscal management. North Carolina is one of only 13 states that have an “AAA" rating from all major rating agencies.
“Continuing to have all three agencies affirm our 'AAA' rating is essential," said Treasurer Folwell. “This allows us to get very favorable rates saving taxpayers millions of dollars. The credit goes to taxpayers who pay for these bonds, and the General Assembly for their conservative fiscal management of the state's finances. I'd also like to thank the staff at the State and Local Government Finance Division for their hard work on the sale."
Folwell added that by minimizing debt service costs, the state will have more funds available for teachers, law enforcement, roads and other core functions of state government.
S&P Global Ratings noted the state's history of prudent fiscal management, low-to-moderate debt burden and progress in addressing other postemployment benefit (OPEB) liabilities while Moody's Investors Service commented on the state's strong, conservative fiscal management. Fitch Ratings noted North Carolina's exceptionally strong ability to close budget gaps during economic downturns.
The N.C. Department of State Treasurer's State and Local Government Finance Division handles the sale and delivery of all state and local debt and monitors the repayment of state and local government debt. More information can be found at http://www.nctreasurer.com/slg.