PENNSYLVANIA — Uri Monson, the Shapiro Administration Secretary of the Budget, announced on Tuesday the successful sale of approximately $1.3 billion in new General Obligation Bonds. The issuance included a refunding amount of roughly $753 million used to refinance about $845 million of outstanding bonds.
The refinancing initiative is set to bring substantial savings for Commonwealth taxpayers over the life of the bonds. The gross debt service savings are estimated at $99.7 million, with net present value debt service savings being around $80.7 million.
“Credit ratings make for good headlines, but more importantly, our sound fiscal management is saving the Commonwealth and our taxpayers millions of dollars,” said Secretary Monson. “Thanks to our recent credit rating upgrade, we are able to fund programs that support the citizens of the Commonwealth instead of higher interest payments.”
The improved pricing performance can be attributed in part to the upgraded Commonwealth Bond Rating from Fitch, from ‘AA-‘ to ‘AA’. Additionally, improved ratings outlooks to ‘positive’ from ‘stable’ were received from Moody’s and S&P in September. As a result, Commonwealth taxpayers are projected to benefit from $6 – $12 million in savings.
In an effort to boost participation and competition among bidders and investors, the Commonwealth sold the bonds across four separate bid groups. These groups attracted a total of 29 bids from eight different bidding entities, demonstrating robust interest and confidence in the Commonwealth’s financial stability.
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