Transportation bonds that were at the center of a dispute between State Treasurer Terry Hayes and Gov. Paul LePage are ready to sell, resolving a conflict that threatened to hold up millions in funding for construction projects around the state.
Hayes announced Wednesday that the state completed its general obligation bond pricing that will fund $114.7 million of projects previously approved by Maine voters. The projects include major transportation infrastructure work, as well as land acquisitions, armory upgrades and improvements at the Maine Community College System, according to a release from Hayes’ office.
Bids were received from 11 underwriters, all below the projected rate of 2.20 percent. The total borrowing costs for the bonds will be 1.54 percent over 10 years.
“The administration, the Legislature, and all of us can be proud of the state’s continually improving financial position,” said Hayes in the release, who pointed out the state’s AA bond rating from Standard & Poor’s and Moody’s credit rating services. “The number of bidders and the results demonstrate strong investor confidence in Maine’s bonds, even with the slight uncertainty stemming from new issue price rules that took effect today.”
Hayes referenced a change in IRS rules that restricts underwriters from changing the initial sale price of bonds based on market fluctuations before the bonds are closed.
Hayes and LePage locked horns over who had the authority to select bond counsel for the transaction. The dispute threatened to tie up the issuance of the bonds, which were intended to finance projects that Maine contractors had already been awarded and were expected to work on this summer.
Hayes, who is running for governor as an independent in 2018, acquiesced to LePage on May 10, citing the continued disruption the dispute was causing among Maine’s construction industry and the potential loss of jobs.
The closing for these sales will take place later this month, with project funding occurring before the end of the fiscal year.
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