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State News

August 7, 2013

Alabama sells news bonds for industrial incentives

MONTGOMERY, Ala. —

State officials are issuing $33 million in bonds to keep promises to new and expanding industries and refinancing nearly $140 million in old bonds to save money.

Two state boards headed by the governor voted unanimously Wednesday to refinance $1.9 million in bonds sold in 2001 for improvements at state parks and $137.7 million in bonds sold between 2001 and 2005 to pay for incentives the state promised new and expanding industries.

The bonds had been at interest rates of 4.5 percent to 5 percent. Bernardi Securities will handle $1.8 million of the refinancing at 1.95 percent interest. Bank of America Merrill Lynch will handle $137.7 million at 2.47 percent. State Finance Director Bill Newton said the refinancing will save the state nearly $12 million.

"It's always good to save money," Gov. Robert Bentley said.

One of the boards also approved having Bank of America Merrill Lynch handle the $33 million in new bonds for 3.63 percent interest. The boards went with the low bidders on the new bonds and the refinanced bonds.

Officials said the new bonds are at a higher interest rate because they are for 20 years, while the refinanced bonds are for shorter periods.

The governor said new bonds are the result of a constitutional amendment that Alabama voters approved in 2012 to let the state issue more bonds to offer incentives to attract new and expanding industries. The $33 million goes toward industrial projects that have already been announced by the governor, including $7.6 million to the Dothan-Houston Co. Airport Authority for an aircraft parts manufacturing plant, $7 million to an aviation training facility for the new Airbus plant in Mobile, and $3.3 million to Golden Dragon Precise Copper Tubing in Thomasville.

 

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