Connecticut issued $450 million in bonds to finance capital projects.
The state sold $250 million in taxable bonds and $200 million in tax-exempt bonds. The taxable bonds mature between 2025 and 2034, yielding between 4.658% and 5.158%. The tax-exempt bonds mature between 2025 and 2044, yielding between 3.24% and 4.13%. The securities received a rating of AA- from Fitch Ratings, AA+ from Kroll Bond Rating Agency, Aa3 from Moody’s Investors Service, and AA- from S&P Global Ratings.
“The long-term rating reflects our view of Connecticut’s robust financial performance, record-high balances in its budget reserve fund, and a reduction in its pension and other postemployment benefits liabilities,” S&P analyst Thomas Zemetis said in a press release.
The issuance included the lowest interest rate spread in 13 years on the 20-year tax-exempt bonds, according to the governor’s office.
“Connecticut’s growing financial strength, and corresponding rise in our national reputation with investors, allowed us to fund critical projects at costs far lower than benchmarked expectations,” state Treasurer Erick Russell said in a press release.
Connecticut will spend almost half of the bond proceeds on affordable housing initiatives. The next largest outlay, some $66 million, will fund improvements managed by the state’s corrections department.
The bonds are general obligations of the state, backed by its full faith and credit.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for $467.2 million. The price reflected a premium of more than $17 million. Acacia Financial Group, Inc and TKG & Associates LLC acted as municipal advisors.