News release from the Governor's Office
ATLANTA - Governor Sonny Perdue today announced that Georgia has once again received triple-A bond ratings from all three rating agencies. Even in the midst of historic revenue reductions, the agencies recognized Georgia's strong fiscal management by awarding the highest bond ratings possible. The high ratings will likely mean significant interest savings.
"We are doing the best we can to weather this economic storm and keep Georgia's fiscal position heading in the right direction," said Governor Perdue. "These ratings not only recognize our efforts to manage the state efficiently, but will also result in savings for Georgia."
Moody's, Fitch, and Standard & Poor's have assigned their triple-A bond ratings with a stable outlook to the State's General Obligation Bonds. The rating firms' individual ratings are Aaa, AAA and AAA, respectively. The triple-A ratings reflect the highest rating available to government issuers and demonstrate the value of Georgia municipal bonds to investors.
Georgia is one of just seven states to maintain the highest bond ratings possible during these difficult economic times.
In May after once again being confirmed for triple-A ratings, the state locked in interest rates at historic lows, 1.54 percent for 5-year bonds (the lowest in state history) and 3.8 percent for the 20-year bonds (the second lowest rate ever for 20-year bonds). Those historic rates translated into $34 million in savings for the state, including $2.3 million in debt service savings in the FY 09 budget and $32 million in one-time savings for refinancing outstanding bonds to lower rates.
The ratings come in advance of next week's negotiated sale of up to $700,000,000 in tax-exempt and taxable Build America Bonds. The sale is expected to maximize the potential investor base for Georgia's bonds in addition to giving retail investors the ability to buy Georgia bonds directly by placing orders on Nov. 2 with their brokerage firm. Institutional orders for tax-exempt and taxable bonds are tentatively scheduled for Tuesday and Wednesday with final award on Wednesday, Nov. 4. By expanding the investor base and increasing demand, the state expects the transaction to result in favorable interest rates for the state. This bond offering gives Georgians the opportunity to invest in their own state while strengthening their portfolio
Projects include local school construction, higher education facilities, public safety projects and road projects. The bond sale is a portion of the capital outlay program approved in the state's 2010 budget.
The bonds are backed by the full faith and credit of the state of Georgia and, subject to the limitations and conditions described in the Official Statement relating to the Bonds, interest on the Bonds is exempt from present State of Georgia income taxation and interest on the 2009F, 2009G and 2009I is excludable from gross income for federal income tax purposes. Individuals can learn more about the bond sale at www.buygeorgiabonds.com .