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Economic Development

June 24 - Georgia Announces Sale of $1.03 Billion in General Obligation Bonds

Savannah Business Journal Staff Report

June 24, 2019 - Governor Brian P. Kemp recently announced that the State of Georgia successfully sold $1.03 billion in three different series of general obligation bonds to fund new construction projects and equipment, make repairs and renovations to existing facilities, and refund outstanding bonds to achieve debt service savings.

“Georgia works diligently to maintain our coveted triple-A bond rating,” said Governor Kemp. “I am incredibly proud of our state's fiscal responsibility efficient use of taxpayer resources. This successful sale allows us to continue to invest in vital infrastructure projects across the Peach State to support economic growth, provide job opportunities in the construction industry, and meet the future needs of our citizens."

The Georgia State Financing and Investment Commission - responsible for issuing the state’s bonds - approved the bond sale at its meeting today. The bond issues were sold on a competitive basis with investors showing solid demand for Georgia's highest-rated bonds.

The overall true interest rate cost for the 2019A bonds, which will provide the funding for the state’s capital projects, was 2.495%. The overall true interest rate cost for 2019C refunding bonds was 1.37%, which provided over 7.14% present value savings over the refunded bonds. The interest on bonds is exempt from Georgia state income taxation for in-state residents.

The state achieved rates of 1.38% for the five-year, tax-exempt bonds; 1.54% for the ten-year, tax-exempt bonds; and 2.44% for the twenty-year, tax-exempt bonds - for a blended rate of 2.37% for the 2019A tax-exempt bonds. Some bonds were sold as federally taxable bonds, with those rates at 1.97% for the five-year taxable bonds and 2.83% for the twenty-year taxable bonds - for a blended rate of 2.80% for the federally taxable 2019B bonds. The overall, true interest rate cost for 2019C refunding bonds was 1.37%, which provided over 7.14% present value savings over the refunded bonds. The interest on all the bonds is exempt from Georgia state income taxation for in-state residents.

The largest amount of funding provides over $246 million for Board of Regents projects for the University System of Georgia. The second largest amount of funding provides for $199 million for local school systems' K-12 and state schools projects. The Technical College System of Georgia will receive over $121 million for various projects located throughout the state.

“Providing state-of-the-art facilities and equipment for educating Georgia’s elementary, secondary, and higher education students is an important component of preparing children and young adults for future employment opportunities," said Governor Kemp.

Other project highlights include:

  • New Carroll County Campus, West Georgia Technical College: West Georgia Tech is one of the largest of the State’s twenty-two technical colleges. The new campus replaces the current Carroll facility, which is fifty years old, and provides additional space to expand instructional offerings.
  • Renovating and remissioning the Metro State Prison as a transitional facility
  • Georgia State University's Convocation Center: Accommodating a growing population at the state’s largest university in terms of enrollment, a 200,000-square foot, multi-use, and state-of-the-art facility will support various athletic events, conferences, commencements, graduation ceremonies, and large gatherings. The design also will integrate athletics-adjacent academic programs, such as kinesiology, health, nutrition, and student media to encourage year-round utilization of the facility.
  • Kennesaw State University's Academic Learning Center: The objective is creating a space where a variety of departments can collaborate in a singular unit for student assistance. It will house offices for University College, the Department of Foreign Languages, the Coles College of Business, the Honors College, the Center for Student Leadership, and Career Planning & Development.
  • Updates at the Georgia World Congress Center and Savannah Convention Center: Projects at the state's two largest convention centers will ensure that tourism remains one of the largest industries in the state, bringing over $66 billion in economic impact.

Fitch, Moody's, and Standard & Poor's rating agencies assigned their triple-A bond rating with a stable outlook to the State's General Obligation Bonds last week.

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