The Maine Municipal Bond Bank sold $87.7 million in bonds to purchase different municipal bonds from state government units and make new loans to those government units.
The bonds mature between 2024 and 2043, yielding between 3.61% and 4.8%. They received a rating of AA+ from S&P Global Ratings and Aa2 from Moody’s Investors Service, which assigned a positive outlook.
“The positive outlook reflects the positive developments occurring at the state level including improved reserves, elevated GDP growth, and positive demographic shifts such as a declining median age,” according to Moody’s.
The bond proceeds will finance the purchase of 18 previously issued municipal bonds from 16 Maine governmental units, and the issuance of 18 new loans to those units. These loans are expected to finance various capital projects across the state, including airport road construction, sewer upgrades, solar panel installation at municipal buildings, and school district improvements. The largest disbursement, about $60 million, will fund the construction of a new elementary school outside of Waterville.
The Maine Municipal Bond Bank is a state agency which provides loans to the state’s cities, towns, school systems, water and sewer districts, and other governmental entities. By selling municipal bonds itself and loaning the proceeds, the bank provides low cost capital to entities across the state, at a potentially lower rate than if such entities had to issue their own bonds. The bonds are general obligations of the bank, backed by its full faith and credit.
Morgan Stanley & Co LLC and BofA Securities Inc served as underwriters on the issuance, purchasing the bonds for more than $91 million. The price reflected a premium of almost $4 million.