Governor Reeves, Treasurer McRae Approve Deal to Save Taxpayers $36 Million
Governor Tate Reeves and State Treasurer David McRae today announced a debt refinancing deal that will save taxpayers $36 million. The savings will be used to reduce debt service payments in upcoming fiscal years.
“Mississippi taxpayers deserve watchdogs to look after their finances. Careful stewardship is essential,” said Governor Reeves. “I want to thank Treasurer McRae for his excellent work on this, and let the people of Mississippi know that we will always look out for their best interests.”
“We have a responsibility to do more with every taxpayer dollar spent,” said Treasurer McRae. “By preserving our credit ratings – especially during the COVID-19 pandemic – and responsibly managing our finances, the State of Mississippi has been able to earn the faith of creditors to the benefit of taxpayers. I am grateful to Governor Reeves and our teams who worked diligently to bring this deal across the finish line.”
The State of Mississippi closed on the $504,225,000 General Obligation Refunding Bonds, Series 2020A, deal and the $37,390,000 General Obligation Refunding Bonds, Series 2020B deal this August. The combined financing allowed the State to restructure its variable rate portfolio into long-term, fixed-rate debt in addition to refunding maturities from previously issued bonds. The Net Present Value Savings for the refunding presented the State with $36 million in savings that will be used to reduce debt service payments in upcoming fiscal years. A low interest rate environment, along with overwhelming interest from municipal investors, led to borrowing costs of 2.325%.
Ahead of the financing, the State secured its credit ratings with Standard and Poor’s (AA/Stable), Moody’s Investors Service, Inc. (Aa2/Secure), and Fitch Ratings (AA/Stable).