ST. PAUL – Today, the State of Minnesota completed a $619.7 million sale of general obligation bonds. The proceeds support capital construction projects such as asset preservation, higher education facilities, highway projects, and economic and redevelopment projects previously authorized by the Minnesota Legislature.

“Across the nation, Minnesota has gained a growing reputation for sound fiscal management, and today’s bond sale illustrates investor confidence in our state,” said Myron Frans, Commissioner of Minnesota Management and Budget. “We have a balanced budget, growing reserves, a healthy surplus, and our economy is growing. Our bond sale today provides the capital necessary to invest in communities across Minnesota, ensuring Minnesotans can continue enjoying the high quality of life they know and deserve.” 

The three series of general obligation bonds sold today include: 

• $397,720,000 General Obligation State Various Purpose Bonds, Series 2018A (3.102 percent interest)
• $206,000,000, General Obligation State Trunk Highway Bonds, Series 2018B (2.999 percent interest)
• $16,000,000, General Obligation Taxable State Various Purpose Bonds, Series 2018C (3.385 percent interest)

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

Sound Fiscal Management

Ahead of the sale, the State of Minnesota was upgraded to AAA by Standard & Poor’s, while Fitch affirmed the state’s AAA rating, and Moody’s affirmed its Aa1 rating. Fitch and Standard & Poor’s rating of AAA is the highest rating awarded by the agencies. A state’s credit ratings play an important role in obtaining low interest rates for a bond sale. Today’s interest rates are in line with other triple-A states.

In upgrading Minnesota to AAA, Standard and Poor’s noted: “The stable outlook on Minnesota reflects our view of the state's improved financial position and recently passed pension reform. The state has shown a commitment to actively managing its long-term liabilities to better align its statutory funding of the pension with actuarially determined contributions and through benefit reductions.”

S&P also called out the state’s sound financial management and leadership, saying: “The state has historically had very strong budget management. Minnesota has strong policies and procedures. It was able to manage through the political impasse between the governor and the legislature over tax reform adopted in the fiscal 2018-2019 biennium… We have assigned a score of ‘1.5’ to the state's overall financial management, on a scale where '1.0' is the strongest score and '4.0' the weakest.”

Access the full report from Standard and Poor’s website.

The low interest rates secured in today’s bond sale also furthers Minnesota Management and Budget’s efforts to manage state finances and debt in a fiscally responsible manner. In April, MMB reviewed recent state bond refinancing, finding that Minnesota has locked in $300 million in savings since 2011. The $300 million in savings is spread out over the life of state bonds, with a savings of $12.8 million in fiscal year 2019 alone. The annual savings ranges from $12.8 million to $21.9 million over the next 10 years. These savings are reflected in the current budget forecast.

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Contact: Keith Hovis, Communications Director
Phone: 651-259-3666
Email: keith.hovis@state.mn.us