State sells bonds at historic low interest rates

The Office of the Tennessee Comptroller of the Treasury announced today the State of Tennessee sold more than $170 million worth of general obligation bonds this week at the lowest overall interest rates in more than 40 years.

The debt offering was sold in two parts, consisting of $140 million in tax-exempt bonds and $30.52 million in federally taxable bonds. The combined true interest cost of the bonds was 2.05 percent.

The tax-exempt bond proceeds will be used to fund new capital projects while the proceeds from the taxable issue will be used to refinance currently outstanding bonds.

The refinanced bonds will result in present value savings to the state of $2.6 million over an eight-year period.

“We chose to refinance some of our bonds at this time because interest rates were so low,” Comptroller Justin P. Wilson, who serves as secretary of the State Funding Board, said in a release. “The low interest rates we were able to get demonstrate, once again, that the state is in excellent financial health.”