Bulk of state's $750 million bond issue to fund major construction projects
Illinois issued $750 million worth of general obligation bonds this week at an all-in borrowing cost of 4.29 percent, according to a Nov. 29 release from the state.
The bonds were sold in two separate competitive auctions, with a December 2017A series accounting for the bulk of the total amount. The $655 million in the December 2017A series bears a final maturity dates of 2042. Bank of America Merril Lynch beat out seven other bids and won the series with a true interest cost of 4.33 percent, the release said.
A December 2017B series accounts for the remaining $95 million and was also awarded to Bank of America Merrill Lynch, which won out over nine other bids with a true interest cost of 3.71 percent. It has a final maturity date of 2027, the release said.
The December 2017A series will go toward major capital construction projects, while the December 2017B series will help the state undertake information technology projects.
“We are very pleased with the strong response that the state received on today’s competitive bids,” Governor’s Office of Management and Budget Director Scott Harry said in the release. “These transactions will allow the state to move forward with funding to address essential capital and infrastructure needs at an attractive interest rate.”
The combined series received ratings of BBB from Fitch Ratings, Baa3 from Moody’s Investors Services and BBB- from Standard & Poor's.