Wilmington, DE – Finance Secretary Thomas J. Cook announced today that Delaware successfully sold $236 million in triple-A-rated general obligation bonds in Tuesday’s annual bond sale, effectively netting a savings of over $8 million for Delaware taxpayers.

With triple-A ratings recently re-affirmed by Moody’s Investors Service, Fitch Ratings, and Standard & Poor’s Rating Services, Delaware was able to obtain some of the best pricing relative to the triple-A index in recent history, even in a volatile market. “Credit quality matters and translates into reduced interest costs to taxpayers,” said Cook. “In this case, the triple-A rating saved Delaware taxpayers $5.8 million when compared to double-A rates.”

Of the $236 million of bonds sold, $36 million sold as Series C represents a refinancing at lower rates, saving taxpayers more than an additional $3 million.

“It is our responsibility to ensure we are using taxpayer dollars efficiently and maximizing the return on our investments,” said Governor Jack Markell. “Our triple-A rating, and the benefits that come with it, are the result of the fiscal discipline and prudent financial management that have become Delaware’s hallmark.”

Delaware’s combined cost of capital on this loan was 2.32%. “While not the lowest ever, it is lower relative to other high quality issuers that have been in the market recently,” said Cook. The state received seven bids; awarding Morgan Stanley &Co., LLC as the highest bidder on Series A, J.P. Morgan Securities LLC on Series B, and Bank of America Merrill Lynch on Series C.

The remaining $200 million, Series A and B, represents various capital projects – including over $100 million in school construction projects, improvements to the Veteran’s Home, National Guard readiness facilities, the Port of Wilmington, libraries around the state, and the rehabilitation of park and wildlife areas.

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Leslie A. Poland
Public Information Officer
Delaware Department of Finance
(302) 577-8522
leslie.poland@delaware.gov

Delaware has received a triple-A credit rating from all three major rating agencies – the highest mark a government agency can achieve. Highlighting the state’s fiscally responsible approach, Moody’s Investors Service, Fitch Ratings, and Standard & Poor’s Rating Services have recognized the state’s strong fiscal practices, as well as the strength of Delaware’s economy and labor market.

“These reports affirm our progress in strengthening Delaware’s economy, while budgeting responsibly,” said Governor Jack Markell. “Recognition of Delaware as one of the top rated states shows Delaware is well-positioned for continued success. However, our work is never finished. We must continue efforts to prepare our workers with the skills they need to compete for jobs, foster a nurturing environment for businesses to start and expand in the state, and ensure our budget is sustainable for years to come.”

The reports take into account expected workforce reductions in the first quarter of 2016 due to the DuPont merger with Dow Chemical, but cite positive trends and continued growth in other employment areas – including business services, financial activities, education, health, leisure and hospitality.

In its analysis, Standard and Poor’s pointed to Delaware’s “diverse economy,” “strong financial and budget management,” “consistently strong general fund reserves,” “moderate overall debt burden,” and “well-funded pension system.”

Delaware has now earned the top rating from all agencies for the past 16 years, including through the recent economic recession and ongoing recovery.

“Delaware has maintained its triple-A ratings through some challenging economic cycles – in large measure due to our disciplined adherence to responsible fiscal practices and focus on economic development,” said Secretary of Finance Thomas J. Cook. “Even through the Great Recession, this administration has maintained the highest possible credit ratings through strong financial management and fiscal discipline, while improving our business climate. The confirmation of our rating will translate to the lowest cost of capital, permitting greater investment in the essential infrastructure that is essential to attracting new business and spurring job creation.”

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Leslie A. Poland
Public Information Officer
Delaware Department of Finance
(302) 577-8522
leslie.poland@delaware.gov