PROVIDENCE – Rhode Island sold $144.7 million in bonds on Wednesday to pay for transportation projects and housing development, R.I. General Treasurer Frank T. Caprio announced.
Caprio called the sale of the general obligation bonds “a tremendous success.” He did not say which projects would be paid for with the latest round of borrowing. Barclays Capital was the offering’s senior manager.
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The bond sale included three tranches, according to Fitch Ratings, which assigned a ‘AA’ rating to the bonds. Fitch also maintained the state’s rating outlook at negative, which was first assigned in March 2009.
“The road to recovery in Rhode Island is projected to be long and slow, with some forecasts projecting continued declines in residential real estate for the next five years and other forecasts reporting that peak employment will not return until 2016,” the ratings agency said in its report prior to the bond sale.
The largest set of bonds – $80 million – were Recovery Zone Economic Development bonds created by the economic stimulus law enacted in February 2009. The federal government will pay for 45 percent of the interest on the issuance, part of the Obama administration’s Build America Bonds program.
“The sale of these Recovery Bonds will help get our economy moving in the right direction by enabling projects to move forward and companies to hire additional employees or bring back workers previously laid off,” Caprio said.
Last June, the U.S. Treasury Department gave Rhode Island approval to sell up to $100.9 million in Recovery Zone Economic Development Bonds and another $151.32 million in Recovery Zone Facility Bonds.
This was only the second sale of Build America Bonds, or BABs, for Rhode Island since the program was created, according to the Treasury Department. The Providence Public Building Authority sold $12 million in BABs to pay for streetscape improvements last June.
In addition to Rhode Island, Arizona, Delaware, Puerto Rico, West Virginia and the Virgin Islands had conducted just one Build America Bond sale through April 30. On the other hand, Illinois had done 134 sales and California and Wisconsin 90 each. Massachusetts had done seven BAB sales.
The General Assembly passed a law last month designating the entire state, as opposed to individual counties, as a recovery zone, which allowed the treasurer’s office to do a single statewide bond sale.
“Many times individual counties in a state will sell recovery bonds, declaring specific geographic areas as recovery zones based on need, so it is unique that an entire state would fit into this category,” Caprio said.
In addition, the rest of Wednesday’s bond issuance was made up of tax-exempt and federally taxable bonds that will be used to pay for capital development, according to Fitch.
Additional information is available at treasury.ri.gov.
