R.I. issues $350M in short-term bonds

PROVIDENCE – The state of Rhode Island recently sold $350 million in tax-free, short-term bonds to help the state through some cash-flow issues.
Tax-anticipation notes have been issued in the past as a way of obtaining cash for operating expenses and projects in advance of tax revenue the state expects to collect later in the fiscal year.
General Treasurer Frank T. Caprio said the state sought to issue the notes earlier than it has in the past because interest rates are low right now.
The bonds – which received an SP 1+ rating from Standard & Poor’s, the agency’s highest rating – were sold at an interest rate of half of percentage point, Caprio said.
State officials are required by state constitution to repay the money in full by the end of the current budget year, June 30, 2011.
The offering “was well received by larger institutional buyers, which demonstrates the market’s confidence in Rhode Island’s financial management practices,” Caprio said.
The lead underwriter for the sale was JP Morgan. Morgan Keegan and Oppenheimer also helped to underwrite the sale.