Vermont issued $90 million in bonds to finance several capital improvement projects.
The state sold the bonds in two series. The 2023 Series A bonds, consisting of $63 million, mature between 2024 and 2043, yielding between 2.96% and 4.33%. The 2023 Series B bonds, consisting of $27 million, mature between 2024 and 2033, yielding between 3.05% and 3.34%. The securities received a rating of Aa1 from Moody’s Investors Service, AA+ from Fitch Ratings, and AA+ from S&P Global Ratings.
The rating reflects “a track record of disciplined financial management and cautious revenue forecasting, which, when coupled with the state’s healthy fiscal reserves and ample expenditure-cutting capacity, position Vermont well through the cycle to absorb any budgetary challenges associated with future U.S. economic downturns,” according to Fitch.
The largest disbursement funded by the bonds will go to initiatives focused on natural resources, which will receive $12 million. Human services projects will receive $11 million.
The bonds will also help finance Vermont’s budget, which state lawmakers passed earlier this summer in dramatic fashion. Governor Phill Scott, a Republican, vetoed the Democratic legislature’s $8.5 billion budget proposal in May, citing increased fees and taxes. One month later, the legislature overrode the veto to pass the budget.
The bonds are general obligations of the state, backed by its full faith and credit.
BofA Securities, Inc won a competitive bid for the Series A bonds. Morgan Stanley & Co LLC served as lead underwriter on the Series B issuance.