OVERALL INTERST COST AT RECORD LOW 1.80%,
SAVING TAXPAYERS MONEY
HARTFORD, CT – Today, Connecticut State Treasurer Shawn T. Wooden announced that the State’s $800 million, 20-year General Obligation (GO) bond sale achieved a record low overall interest cost of 1.80% and were purchased by investors at the lowest bond pricing spreads since 2014.
“The General Obligation bond sale results demonstrate how investor confidence remains strong in the State of Connecticut,” said Treasurer Shawn Wooden. “Earlier this month, independent ratings agencies maintained the State’s credit ratings and stable outlooks, which led to two record setting bond sales, both of which will save taxpayer dollars and provide stability to the State’s long-term financial future. As we continue to confront the public health crisis and economic downturn, it is more important than ever that Connecticut remains fiscally-responsible.”
Consistent with past practice, retail investors were given priority during a special retail order period on Monday, December 14, bringing in $253 million of retail orders. In addition, institutional investors placed orders for $2.57 billion of bonds on Tuesday, December 15, bringing total orders to $2.8 billion, over 3.5 times the bonds available. This high volume of orders and competition for our bonds allowed the State to reduce overall costs in the final pricing.
The overall interest cost on these bonds is 1.80%, the lowest overall interest cost on any GO Bond sale on record — even lower than the 2.19% interest cost on the UConn 2000 bonds sold just last week.
“These results also reflect the extremely low interest rate environment in the bond market today, combined with Connecticut’s improving bond pricing spreads; allowing us to demonstrate the strong financial foundation that we are building here in Connecticut,” continued Treasurer Wooden. “Our timing on this sale was just right and resulted in a lower cost of funds for Connecticut residents. In Fiscal Year 2021 and beyond, our financial governance needs to remain forward-thinking, as we continue to build towards a sustainable economic recovery.”
This GO bond issue will fund $200 million of local school construction projects; $146 million of improvements to state universities and community colleges; $86 million of grants for economic development, municipalities and not-for-profits; $73 million for technology improvements; $77 million for the Crumbing Foundations program; $71 million for Clean Water Fund grants; and the balance for various state programs for housing, environmental initiatives, renovation of state buildings, and the Small Business Express Program.
In advance of this GO bond sale, all four major rating agencies affirmed their credit ratings for Connecticut’s GO bonds along with “Stable” outlooks: Moody’s Investors Service at ‘A1’, Standard & Poor’s Global Ratings at ‘A’, Fitch Ratings at ‘A+’, and Kroll Bond Ratings at ‘AA’.
This GO bond issue is scheduled to close on January 6, 2021. For more information on the State visit BuyCTBonds.com.
