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Record Billion Dollar Bond Bids for Schools

December 5, 2007

MONTGOMERY, Ala., December 5, 2007 – Bids were opened this morning for the state’s largest state-level bond sale in Alabama history.  Competitive bids were received from seven (7) underwriters.  The lowest bid came from Lehman Brothers, LLC, quoting a true interest cost (TIC) of 4.181003.

“Governor Riley’s innovative education programs over the past four years are now complemented by the largest school construction initiative in the state’s history,” said Finance Director James Allen Main. 

The sale is the largest bond auction in the U.S. municipal market in almost 10 months, according to Bloomberg Financial. The bonds carry the third-highest of 10 investment-grade ratings from Moody's Investors Service and Standard & Poor's.   

K-12 schools are to get $690.6 million, two- and four-year colleges and universities $256.9 million, other special projects $68 million, and the Alabama Public School and College Education Incentive Fund, a fund controlled by legislators and the Governor, will receive $55 million.  Industrial training for Alabama companies will get $20 million. 
            Earlier this year, the State Legislature passed the legislation authorizing the Alabama Public School and College Authority to sell and issue $1,070,585,022 in aggregate principal.

Although initial plans were to break up the bond issue and sell it over two years, some school systems had major projects planned that needed a commitment for full funding. 

Selling these bonds all at once will give systems the ability to plan entire projects instead of breaking them into smaller pieces,” continued Main.  “We are excited to award this bid to Lehman Brothers and move forward with improvements for education in Alabama.” 


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About the Alabama Department of Finance

The mission of the State of Alabama Department of Finance is to provide outstanding resourceful leadership and service in areas of financial management and operational support to advance the Governor’s mission of restoring trust and transforming state government.  The Finance Director is the chief financial officer of the state, the advisor of the Governor and of the Legislature in financial matters, and at all times, is charged with protecting the financial interests of the state. The Director is also responsible to the Governor for the administration of the Department of Finance and its divisions:  purchasing, comptroller, information services, budget, service management, risk management, legal, finance accounting and debt management.

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