Wisconsin Selling $255 Million of Debt: Municipal Deals

Wisconsin is selling $255 million of general-obligation bonds this week as its debt heads for the second-straight year of outperforming the $3.7 trillion municipal market, the longest streak since 2010.

The competitive offering scheduled for July 9 will fund previously approved capital projects, including the Stillwater bridge connecting the state to Minnesota, said David Erdman, assistant capital finance director for Wisconsin. The bonds are federally tax-exempt though subject to state levies.

“Cash is needed for any one of the projects that are in the most recent and prior capital budgets,” said Erdman, who is based in Madison.

The state’s most recent sale was for about $340 million of transportation revenue bonds in March, Erdman said.

This offering is unusual as it includes serial maturities with a “very short” call date, Erdman said. The bonds maturing May 1, 2022, to May 1, 2026, are subject to that shorter call, he said. They are callable at par on or after May 1, 2020, bond documents show. The bonds maturing on or after May 1, 2027, are callable at par on or after May 1, 2022.

The shorter call date is “something new that we haven’t had in our competitive sales in the past,” Erdman said, noting the standard call for munis is usually 10 years.

Dairyland Debt

Moody’s Investors Service ranks Wisconsin’s general obligations Aa2, the third-highest investment grade. The state’s jobless rate fell to 5.7 percent in May, the lowest since October 2008, according to the Bureau of Labor Statistics. Wisconsin ranked fourth among U.S. states in a measure of improvement of tax revenue for the year through March, according to the Bloomberg Economic Evaluation of States.

Wisconsin’s debt has climbed 5.8 percent this year through July 2. That outperforms the broader municipal market’s 5.7 percent gain, S&P Dow Jones Indices show. The state outperformed the muni market last year. The last two-year stretch of gains was 2009-2010.

Wisconsin joins issuers from Indiana to Connecticut offering about $3.6 billion in long-term debt this week. That’s up from about $2.5 billion of issuance during last week’s holiday-shortened period, data compiled by Bloomberg show.


To contact the reporter on this story: Elizabeth Campbell in Chicago at ecampbell14@bloomberg.net

To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net Stacie Sherman

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