Governor Warner Announces $250 Million for Transportation Through Sale of Notes
Governor Warner Announces $250 Million for Transportation Through Sale of Notes
Investors show confidence in bond rating, VDOT performance
Governor Mark R. Warner announced today that businesses and citizens are showing their confidence in the Virginia Department of Transportation (VDOT) by investing $250 million in state transportation projects through the purchase of Federal Highway Reimbursement Anticipation Notes, or FRANs.
The notes authorized for sale by the Commonwealth Transportation Board received a solid double "A" credit rating, the highest possible rating, by the three major bond rating agencies: Moody's, Standard & Poor's and Fitch Investors Services. The average interest rate was 3.5 percent. The strong credit rating and low interest rates allow the Commonwealth to save taxpayer dollars through lower borrowing costs.
Nearly one-third of the notes sold last week were purchased by citizens and small businesses. In past FRANs sales, a much smaller percentage of notes - 10 percent or less - were purchased by individuals, with the remaining bought by large corporations.
"It's clear that Virginia's commitment to financial stability and VDOT's dramatically improved on-time and on-budget performance and other reforms have brought a growing investor base to this market," Governor Warner said. "Large and small businesses, as well as individual investors, are demonstrating their faith in VDOT and in the Commonwealth by putting money on the table."
Investors also were willing to buy more notes. The CTB offering generated interest enough to buy $424 million in FRANs during this sale, but the authorized limit was $250 million.
The proceeds of this bond sale will be used to fund projects in the Commonwealth's Six Year Program for highways and transit. The bond sale was authorized by the General Assembly, in accordance with the debt management policies of the Commonwealth Transportation Board and the Treasury Board, and the timing of the sale and the use of the bond proceeds were approved by the Commonwealth Transportation Board as part of the Six Year Program adopted in June 2005.
http://www.governor.virginia.gov/Press_Policy/Releases/2005/Sep05/0929.htm