ST. PAUL – The State of Minnesota has completed $662 million sale of general obligation bonds. The proceeds from this bond sale support capital construction projects such as transportation infrastructure, highway construction, economic and business development, asset preservation, higher education facilities, and other redevelopment projects previously authorized by the Minnesota Legislature.

"National investors view Minnesota’s general obligation bonds as strong investments,” said Myron Frans, Commissioner of Minnesota Management and Budget. “The low interest rates from our sale are equal to or better than the AAA municipal market index, helping secure investments in the future of Minnesota at a lower cost. We are seeing visible evidence of what sound fiscal management means for our state’s finances.”

The four series of general obligation bonds sold today include:

• $406,900,000 General Obligation State Various Purpose Bonds, Series 2019A (2.21 percent interest)
• $190,690,000 General Obligation State Trunk Highway Bonds, Series 2019B (2.06 percent interest)
• $36,345,000 General Obligation Taxable State Various Purpose Bonds, Series 2019C (2.08 percent interest)
• $27,570,000 General Obligation State Various Purpose Refunding Bonds, Series 2019D (1.17 percent interest)

Kutak Rock LLP acted as bond counsel on the transaction and Public Resources Advisory Group was the state’s financial advisor for the sale.

Sound Fiscal Management

Last month, top financial analysts Standard & Poor’s and Fitch affirmed Minnesota's AAA rating, the highest rating awarded by the analysts. A state’s credit ratings play an important role in obtaining low interest rates for a bond sale.

Fitch and Standard & Poor’s note that credit factors such as Minnesota’s diverse economy, strong financial results and healthy reserves, and moderate debt levels have positioned the state well to navigate future fluctuations in the economy. Standard & Poor’s added that the passage of the pension reform bill in 2018 and continuation of strong reserve levels influenced their rating decision.

Governor Walz and the Legislature continued our state’s commitment to strong fiscal management by prioritizing budgetary balance over the entire four year budget horizon. Minnesota Management and Budget (MMB) recently released the General Fund Balance Analysis and Consolidated Fund Statement. After accounting for 2019 legislative activity, the general fund statement projects a positive balance of $242 million in FY 2020-21. In addition, the July Revenue and Economic Update shows total revenue for FY 2019 will be $636 million over February forecast estimates. MMB will release a complete FY 2019 picture, including final expenditures, with the November forecast. 

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