State sells $350M in tax-anticipation notes to cover operating expenses

PROVIDENCE – General Treasurer Frank T. Caprio this month announced that the state has issued $350 million in tax-anticipation notes.
The notes were sold at a rate of .5 percent. They will be repaid in full with interest by the end of FY 2011 – June 30, 2011 – as required by the state’s constitution.
“[Tax-anticipation notes] are used to cover operating costs in the state budget through the fall and winter months, until the larger corporate and individual tax collections arrive in the spring,” said Caprio, who is seeking the Democratic nomination for governor. “[The] offering was well received by larger institutional buyers, which demonstrates the market’s confidence in Rhode Island‘s financial-management practices.”
Rhode Island received Standard & Poor’s highest rating – SP 1+ – for the short-term notes, Caprio said.
This year, Rhode Island borrowed earlier than usual due to the availability of favorable interest rates. •