The State Treasurer’s Office on Thursday announced $15 million in debt service savings from the sale of $106 million in general obligation refunding bonds.
The bonds were sold at a reduced interest rate and are the first in a line of three sales that will take place over the next two months.
State Treasurer Dale Folwell said that the bonds were issued and sold to take advantage of lower interest rates. which will reduce the cost to taxpayers as the debt is repaid.
The first bonds were purchased by Citigroup Global Markets, Inc. at an interest rate of 1.39 percent, saving taxpayers $15 million in debt service costs.
“We are very pleased with the refunding,” Folwell said. “We were able to secure an interest rate well below the ‘AAA’ indices. The favorable rate reflects the fiscally conservative management of our state by the General Assembly. It is also the result of the taxes paid by the hard-working citizens and businesses that keep our credit quality so high. I’d also like to thank the bond purchasers and all those whose efforts contributed to this successful result.”
Folwell said that by reducing the cost of servicing this debt, the state will have more funds available for teachers, law enforcement, roads and other core functions of state government.
In more good financial news, last week all three major national bond rating agencies re-affirmed the state’s AAA bond rating.
North Carolina is one of only 12 states to earn the AAA bond rating by all three rating agencies.
“North Carolina’s unanimous AAA bond rating is a powerful endorsement of the Republican-led General Assembly’s smart spending strategies, record savings reserves and unyielding commitment to our state’s financial security this decade,” House Speaker Rep. Tim Moore (R-Cleveland) said. “As one of only 12 states to obtain a AAA bond rating by all three major agencies, North Carolina can save taxpayers tens of millions of dollars through lower interest rates, continue to attract rapid job growth, and safeguard our citizens with one of the most fiscally sound governments in the United States.”