Office of Administration News
December 5, 2011
State of Missouri saves millions through refinancing bonds
JEFFERSON CITY, MO - The State of Missouri's Office of Administration today announced the refinancing of series 2001 bonds that will save the state $3.6 million over the life of the bonds. Annual savings ranges from nearly $212,000 in FY 2012 to nearly $345,000 in FY 2022 when the bonds are paid off.
"This is another example of state government exercising smart fiscal management," said OA Commissioner Kelvin Simmons. "Under Gov. Nixon's leadership, we will continue to find more ways to reduce spending and make state government more efficient."
There was strong demand for the Missouri-backed bonds as nine firms placed a bid for the bonds during a competitive sale. Jefferies & Company Inc. prevailed as the winning bidder because it offered the state the lowest interest cost.
The sale will finance the refunding of the state's outstanding Series 2001 Bonds at lower interest rate levels of 1.97 percent, and will provide a total budgetary savings of approximately $3.6 million. In addition, the state will achieve present value savings of 14.18 percent of the amount of par refunded.
Recently, all three rating agencies - Moodys; Fitch; and Standard and Poor's - reaffirmed Missouri's AAA bond rating, which is the highest rating possible. A bond rating is a measure of the quality and safety of a bond, based on the issuer's financial condition. More specifically, it is an evaluation from a rating service indicating the likelihood that a debt issuer can meet scheduled interest and principal repayments.
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