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Sacramento Sells Almost $300 Mln in Bonds

By Munichain News Desk

The Sacramento Transportation Authority issued $296.4 million in bonds to refund a previous issuance.

The bonds mature between 2028 and 2038, yielding between 2.7% and 3.38%. They pay interest at 5%. The securities received a rating of AAA from Fitch Ratings and AAA from S&P Global Ratings.

“The ‘AAA’ rating reflects a very strong debt service cushion relative to historical revenue volatility coupled with no expectations for additional leverage,” according to Fitch.

The bond proceeds will fully refund the principal on three bond issuances: Series 2009, Series 2014A, and Series 2015A. The securities are limited obligations of the authority, payable by revenue from a half-cent sales tax instituted in 2004. The tax, known as Measure A, funds transportation department initiatives, including public transit, road repair, congestion reduction, and environmental efforts.

The issuance comes as support grows in Sacramento for another half-cent sales tax. Earlier this month, Sacramento Mayor Darrell Steinberg said he would propose a countywide ballot initiative to institute a half-cent tax that would generate revenue for transportation, climate, and housing issues. Steinberg said the tax could generate up to $9 billion over the next 40 years, two-thirds of which would go to transportation projects, Courthouse News reported. Voters could decide on the tax as soon as November of next year.

BofA Securities Inc served as lead underwriter on the issuance, purchasing the bonds for more than $342 million. The price reflected a premium of $46 million.

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