The state of Tennessee had the largest general bond sale in its history, closing approximately $ 658.7 million in bonds. The bonds sold at a record real interest cost of 1.41%.
The debt issue was sold as two series of bonds consisting of $ 167.75 million tax-exempt Series A bonds and $ 490.9 million taxable Series B bonds.
A majority of the bonds were issued to refinance certain outstanding bonds in order to take advantage of low interest rates. These repayment obligations will allow the Crown to realize $ 50 million in net present value interest savings over the next 14 years.
Approximately $ 125 million of the bond proceeds will be used to repay commercial paper issued to fund investment projects such as the new State Library and Archives building, the new State Park Pavilion of Fall Creek Falls, higher education buildings and many more.
Tennessee’s debt level is one of the lowest, if not the lowest, of any state, and investors are recognizing its strong history of balanced budgeting and fiscal stability. Investor demand for Tennessee GO bonds generated a premium of $ 43.4 million.
“Tennessee is one of 13 states to have a triple A credit rating from each of the three major rating agencies,” Comptroller Jason Mumpower said. “As Tennesseans, we pride ourselves on our state’s fiscal responsibility. Governor Lee and the General Assembly’s commitment to sound financial principles saves us all money every time we sell bonds.