The state of Connecticut sold more than $715 million in bonds for a variety of projects, about half of which will improve its education system.
The bonds were issued in three series. The state sold $350 million in taxable general obligation bonds, $266 million in tax-exempt general obligation refunding bonds, and $100 million in tax-exempt general obligation bonds.
The taxable general obligation bonds mature between 2024 and 2033, with yields between 4.5% and 5%. The tax-exempt general obligation refunding bonds mature between 2023 and 2033, with yields between 2.95% and 3.45%. The tax-exempt general obligation bonds mature between 2024 and 2043, with yields between 2.95% and 3.74%. The bonds received a rating of Aa3 from Moody’s Investors Service, AA- from S&P Global Ratings, and AA- from Fitch Ratings.
The rating reflects Connecticut’s “superior gap-closing capacity, as well as its wealthy and diverse, yet slow-growing economic profile. The rating also incorporates the state’s elevated liability burden, carrying costs and expenditure growth trends, which are likely to remain comparatively high over time,” according to Fitch.
The bonds will be used to finance school construction; public housing; economic development; community care facilities; state parks; and state open space. About half of the bonds’ proceeds will be used to build new schools, according to the state’s bonds website.
The bonds will be backed by the full faith and credit of the state of Connecticut, which has the highest per capita income of any state, and financed by property taxes.
Morgan Stanley & Co. LLC served as lead underwriter on the issuance.