ANNAPOLIS – The state will save $23 million under a deal to refinance more than $570 million in bonds, it was announced Wednesday at a Maryland Board of Public Works meeting.
Citigroup Global Markets Inc. will charge the state an interest rate of just under 3.1 percent for the general obligation bonds, said state Treasurer Nancy Kopp.
Kopp sits on the Board of Public Works with Gov. Robert Ehrlich and state Comptroller William Donald Schaefer.
The general obligation bonds will go to paying for a “whole range of capital projects” throughout the state, according to Howard Freedlander, spokesman for the treasurer’s office.
The 3.1 percent rate is an improvement over the state’s last bond sale in July when Merrill Lynch charged a 3.889 percent rate, he said.
“That’s $23 million we don’t have to spend,” Ehrlich said on the significance of the savings, adding that the state was taking advantage of “floating interest rates,” as any private citizen would do.
Kopp agreed, saying the state was able to get such a good deal because of its triple-A, or excellent, bond rating.
A bond rating measures a state’s “credit worthiness.” Maryland is one of just seven states with a triple-A rating, said Freedlander.
Maryland’s current debt is $800 million, according to the governor’s office. Freedlander said the triple-A rating shows that despite this debt, major bond rating houses believe the state has a secure and diverse economy, and is “run in a fiscally prudent manner.”
Freedlander added the state was especially happy with the low rate, because over all interest rates have been “inching up” recently. – 30 – CNS-10-6-04