Thursday, May 30, 2024

NCtrend: Uncommon bonds

Gov. Pat McCrory wants North Carolina to issue as many as $2.4 billion of bonds for transportation improvements and to improve aging state facilities, possibly prompting the state’s first general-obligation bond election since 2000. It’s not that state lawmakers have stopped taking on debt to construct university buildings or expand roads — they have just paid for them by issuing more than $3 billion in certificates of participation and other bonds that attract little publicity and don’t require voter approval. Investors demand more interest on so-called “special indebtedness” compared with GO bonds, so it costs the state about $3.4 million extra over the life of a $100 million bond, according to State Treasurer Janet Cowell. North Carolina has the capacity to issue $700 million in general-fund debt  and $1 billion in transportation bonds without exceeding targets recommended as prudent by state officials.
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