State Treasurer Nick Khouri today announced that the state of Michigan successfully sold more than $149 million in General Obligation Environmental Program bonds.
The sale came with strong investor interest as 10 underwriters submitted competitive bids to purchase $149.2 million in tax-exempt bonds with maturities ranging from 2027 to 2033.
Bank of America Merrill Lynch was the winning underwriter with a 3.22 percent true interest cost bid.
“Today’s bond sale shows that investors are willing to put their dollars behind Michigan,” Khouri said. “As Standard & Poor’s acknowledged when they upgraded Michigan’s credit rating, our state has worked hard to improve its financial position and economy in recent years. I am very pleased with today’s sale, which continues to reaffirm Michigan’s comeback.”
The bonds are being issued under the Great Lakes Protection and Clean Michigan Initiative Program and will primarily support environmental contamination remediation, water infrastructure, asset management plans, and water quality monitoring in communities across the state.
“Modern and reliable infrastructure play an important role in protecting public health and our state’s environment,” said C. Heidi Grether, director of the Michigan Department of Environmental Quality. “These funds have allowed us to build a stronger environmental foundation while also investing in the state’s future by helping communities make critical updates and repairs to aging infrastructure.”
Prior to the bond sale, Standard and Poor’s, Moody’s Investor Services and Fitch Ratings conducted a thorough review of the state’s economy and finances to determine a credit rating.
Based on the improvements to Michigan’s economic and financial conditions since the Great Recession, S&P upgraded the state’s credit rating from AA- to AA with a “stable outlook.”
Moody’s and Fitch affirmed their ratings respectively at Aa1 Stable and AA Stable.
The agencies’ ratings enable the state to borrow money at a lower interest rate, which translates to taxpayer savings and reflects the general creditworthiness of the state.
Dickinson Wright PLLC served as bond counsel, with Robert W. Baird as financial advisor on the sale.