Buyers 'eager' to purchase $345 million in higher education facilities bonds

Buyers 'eager' to purchase $345 million in higher education facilities bonds

August 27th, 2014 by Andy Sher in Local - Breaking News

NASHVILLE - Tennessee officials say the state's School Bond Authority has just completed the sale of $345 million in higher education facilities bonds at historically low rates.

The money is being used to finance the costs of projects in the University of Tennessee and Tennessee Board of Regents systems.

"This may be the most extraordinary sale in the Authority's history." said state Comptroller Justin P. Wilson in a news release.

He called the low interest rates "a testament to the financial management and integrity of Tennessee's higher education system and institutions. Taxpayers should be proud of this incredibly successful sale and the savings to the state's institutions."

The School Bond Authority sold $132 million in 2014 Series A taxable bonds at a true interest cost of 3.59 percent. The bonds included new money and refunding bonds. Proceeds of which will repay a revolving credit facility, finance additional project costs, and refinance certain bonds outstanding.

Refinancing will save the state's higher educational institutions more than $6 million.

The School Bond Authority also sold $213 million of 2014 Series B tax-exempt refunding bonds. The true interest cost of 2.81 percent will result in an additional $17.8 million savings to the institutions.

Buyer interest in the bonds allowed the School Bond Authority to reprice most of the maturities on the bonds from 5 to 10 basis points lower than the price that was initially offered.

The bonds were rated AA+ by Fitch Ratings, Aa1 by Moody's Investor Service, and AA by Standard & Poor's. All of the bonds have stable outlooks.