ST. PAUL, MN—Today, the State of Minnesota’s $1.2 billion general obligation bond sale received historically low interest rates. The proceeds support capital construction projects such as asset preservation, higher education facilities, highway projects, and economic and redevelopment projects previously authorized.

As part of the sale, Minnesota refinanced $704 million in existing bonds saving the state approximately $105 million, which includes $42 million in savings to the general fund and $48 million in savings to the trunk highway fund for Fiscal Year 2021. Like refinancing a house, the state actively monitors interest rates and identifies opportunities for savings. By refinancing state debt at the right time and taking advantage of historically low interest rates, Minnesota is responsibly managing debt and saving taxpayer money. 

Additionally, the November forecast will show an additional benefit from today’s low interest rates when we next reforecast ongoing debt service costs. Compared to today’s interest rates, the February 2020 forecast had assumed an interest rate of 3.2% for this year’s bond sales.

“The timing couldn’t be more perfect to conduct our biggest bond sale ever and earn the best interest rates in our state’s bond sale history,” said Minnesota Management and Budget Commissioner Myron Frans. “Today’s successful sale allows us to continue to make investments in vital public works projects and save taxpayers more than $100 million.”

The seven series of general obligation bonds sold today include: 

• $330,360,000 General Obligation State Various Purpose Bonds, Series 2020A (1.596 percent interest) 
• $152,020,000 General Obligation State Trunk Highway Bonds, Series 2020B (1.256 percent interest) 
• $20,515,000 General Obligation Taxable State Various Purpose Bonds, Series 2020C (1.259 percent interest) 
• $128,115,000 General Obligation State Various Purpose Refunding Bonds, Series 2020D (0.158 percent interest) 
• $163,380,000 General Obligation State Trunk Highway Refunding Bonds, Series 2020E (0.449 percent interest) 
• $223,970,000 General Obligation Taxable State Various Purpose Refunding Bonds, Series 2020F (0.976 percent interest) 
• $180,190,000 General Obligation Taxable State Trunk Highway Refunding Bonds, Series 2020G (0.946 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. 

Ahead of the sale, Minnesota’s credit ratings were reaffirmed by Fitch (AAA, stable outlook), Standard & Poor’s (AAA, negative outlook), and Moody’s (Aa1, stable outlook). A state’s credit ratings play an important role in obtaining low interest rates for a bond sale. AAA is the highest credit rating awarded by the agencies.