State Has Record Participation in $500 Million GO Bond Sale

Treasurer Kennedy Says State’s Improved Financial Outlook Was Key to Successful Sale

BATON ROUGE, LA – The state had an all-time record number of investment firms participating in its $500 million general obligation bond sale on September 21, according to State Treasurer John Kennedy. This was the state’s first new money general obligation bond series issued for capital purposes since 2004.

“The turnout indicates that the market sees the state’s credit as improving,” said Treasurer Kennedy. “Louisiana has been working hard to fully recover financially from Hurricanes Katrina and Rita, and the success of this bond sale shows that our efforts were well worth it.”

The state used the PARITY Internet bidding platform to retrieve competitive bids from nine investment firm syndicates. The online system maximizes the number of investors who can participate in the bond sale, enables investors to revise bids until seconds before the bid deadline, and leads to the most cost-effective interest rate possible for the state. Morgan Stanley beat out bids from other participating investment firms with a 4.277 true interest cost.

“This interest rate is a good indicator of the market’s reception of these bonds,” said Treasurer Kennedy. “We had a 4.56 percent rate at our July sale of Gulf Tax Credit Bonds, so we were very pleased with the results, especially considering what the state has gone through as a result of the hurricanes.”

Moody’s, Standard and Poor’s and Fitch gave the state’s general obligation bonds a rating outlook of “stable” and affirmed their respective ratings on the bonds. Fitch and S&P affirmed the state’s “A” rating, and Moody’s affirmed its “A2” rating. FSA, a “AAA” rated insurer, provided bond insurance for the deal.


                                                                                                            ###