Low interest rates and a top-of-the-line bond rating will save the state more than $152 million on debt it refinanced, Gov. Nathan Deal said Thursday.
Deal said the state continued to earn a AAA bond rating, signalling a stable economic and financial outlook for the state, from the three main credit-rating agencies.
The state of Georgia on Thursday essentially refinanced construction bond debt issued in 2007, 2008, 2009 and 2011 which had higher interest rates. Much of the state’s borrowing for, say, a college building or reservoir project, is paid back over 30 years.
Deal said the state would save just over $152 million in debt payments over 12 years. Earlier this year, the state resold older debt from the mid-2000s at lower interest rates, saving more than $88 million in interest payments.
“Georgia’s diligence in maintaining the AAA rating and monitoring market conditions have allowed us to lower the state’s debt service payments and save taxpayers millions of dollars,” said Deal. “We will be able to use these savings to help fund other priority services for our citizens. I am proud that our fiscal responsibility can translate into a better use of taxpayer resources”
The AAA bond rating is coveted by governments because it means they can borrow at low rates of interest, which is especially important after Deal and lawmakers approved record borrowing this year for a host of projects.
In making their decision to continue Georgia's AAA bond rating, Deal said the agencies cited a growing economy, the state's relatively well-funded retirement systems, and growing state reserves.
The governor had set a goal of leaving office in January 2019 with $2 billion left in the state's savings account. His office announced the state had reached that goal in September, more than two years early.
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