An $839.8 million Special Tax Obligation transportation bond sale drew historic levels of demand from investors, according to the state treasurer’s office. It also included a record level of retail orders.
The bond sale, the largest of its kind in state history, consists of two series. The $700 million 2015 Series A will fund transportation infrastructure improvements statewide and the $139.8 million Series B will refinance existing bonds for savings. The refunding will produce $18.4 million in debt service savings over the next 13 years.
The treasurer’s office said the two-day sale, conducted Sept. 30 and Oct. 1, saw $441.8 million of retail orders placed in a one-day individual investor retail order period. That was the highest level for any sale in the history of the state.
Following the retail-order period, bonds were offered to institutional investors, and a total of $2.3 billion in orders was placed for the bonds offered. Because orders far exceeded bonds available, the state was able to reduce interest rates on the bonds in the final pricing. The final overall interest cost on the $700 million, 20-year new money bonds was 3.24 percent
Dedicating a portion of the state’s sales tax to transportation improvements was received well by investors. The treasurer’s office said in a statement interest in the bonds, according to feedback from rating agencies and potential investors, was enhanced because of provisions that funds from the tax will be stored in a transportation fund lockbox and can’t be used for general fund purposes.
Among the specific projects to be funded are improvements to the New Haven Rail Line; the New Haven – Hartford – Springfield Rail Project; the I-84 Waterbury Improvement Program; and the I-95 New Haven Harbor Crossing Corridor Improvement Project.
