News Column

Demand Strong for State of Michigan Bonds

June 27, 2014

LANSING, Mich., June 27 -- The Michigan Department of Treasury issued the following news release:

The State of Michigan, this week, sold $85.3 million in general obligation bonds, which are backed by the full faith and credit of the state. Proceeds will be used for environmental programs that provide loans to local units of government statewide, to improve water quality through sewage treatment, storm water, and water pollution projects.

The sale was well received by investors, with buyers putting in orders for four-times more bonds than were available, allowing interest rates to be lowered across all maturities when compared to expectations.

"We have worked hard to grow and diversify our economy and manage our financial obligations responsibly," said Governor Rick Snyder. "The strong interest in this sale indicates that investors have recognized the steady improvements we have made. We will continue to address our challenges head-on and reinvest in our communities to ensure the best quality of life for Michiganders."

More than a third of the sale was purchased by retail investors in Michigan. The all-in interest cost of the transaction was 3.3%. The bonds will mature in 14 years. The majority of bonds were sold on a tax-exempt basis, which is an attractive benefit for many investors.

"Interest rates are still near historic lows, and we capitalized on the opportunity to borrow longer term at attractive levels," said State Treasurer Kevin Clinton. "Our ability to access capital at a low cost is a direct result of our focus on making the right financial choices."

The issuance was sold through negotiation by Barclays Capital, Inc.The Huntington Investment Company and PNC Capital Markets LLC were co-managers. Miller Canfield served as bond counsel with Robert W. Baird & Co. serving as municipal advisor.

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Source: Targeted News Service

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