Bonds

Vermont’s $153.3 million sale of general obligation bonds in three series generated a nearly $30 million premium on top of that, state treasurer Beth Pearce said.

Proceeds will fund new capital projects and refinance debt.

The refunding portion generated more than $7.6 million of savings on a net present value basis, according to Pearce.

“Investors continue to seek out Vermont bonds as a secure and reliable investment option,” she said.

Vermont issued “citizen bonds” as part of the overall offering, which gave Vermont citizens and retail investors first priority to purchase $39.6 million of bonds, priced on a negotiated basis April 29. Morgan Stanley was lead manager.

Additionally, the state sold $113.7 million of new-issue Series A and B general obligation bonds competitively on April 27.

The state received 12 bids for the bonds. They were won by a syndicate lead by Citi.

Public Resources Advisory Group was the municipal advisor. Locke Lord LLP was bond counsel.

Capital projects the General Assembly authorized include clean water initiatives, improvements to state buildings, public safety, housing, conservation and recreation projects.

Vermont has New England’s highest GO ratings. Fitch Ratings and S&P Global Ratings rate Vermont GOs AA-plus, while Moody’s Investors Service rates them an equivalent Aa1. While S&P assigned a negative outlook, Fitch and Moody’s assigned stable.

The ratings, Pearce said, reflect Vermont’s financial position and history of fiscal discipline. Still, rating reports also cited continued demographic and workforce challenges, as well as long-term liabilities related to pensions and other post-employment benefits.

“The rating agency reports are clear about the challenges ahead and Vermont must continue to take steps to address these issues so that we can continue to borrow for needed infrastructure at competitive rates,” Pearce said.

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