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On July 24, 2013, Maryland sold $475.0 million in general obligation bonds in a competitive sale to institutional investors. In light of reduced retail demand for the State's bonds due to the current low interest rate environment, a retail component was not offered for this sale. The State Treasurer's office will reassess market conditions to determine if a retail component will be included in its next sale which is currently expected in February or March 2014.
If you may be interested in buying bonds in the future, you may want to know what Maryland does with the proceeds from its general obligation bond sales, the security for these bonds and the bond ratings. Maryland does not use general obligation bond proceeds to close budget gaps or to fix cash flow problems. You can see what these bonds finance as you drive throughout the State and see the construction of State facilities; the construction by local governments of public schools, community colleges, and jails and correctional facilities; and the construction of hospitals, cultural and other projects. In fact, since 2007, Maryland has used more than 60% of the proceeds of its general obligation bonds to finance the construction of public schools and higher education facilities in the State. I believe that these investments in education have contributed to the 2013 recognition by Education Week of Maryland's public education system as the highest ranking in the country for the fifth year in a row.
Maryland’s general obligation bonds are secured by the full faith and credit of the State. At least since the end of the Civil War, the State has paid the principal and interest on its general obligation bonds when due. Maryland is one of ten states with AAA ratings from all three rating agencies. The states are Maryland, Alaska, Delaware, Georgia, Iowa, Missouri, North Carolina, Texas, Utah and Virginia. On July 10 and 11, 2013, Moody’s Investors Service, Standard & Poor’s (S&P) and Fitch Ratings all affirmed the State’s AAA rating.
Moody’s had assigned a negative outlook to Maryland's General Obligation Bonds due to its indirect linkages to the weakened credit profile of the U.S. government On July 19, 2013, Moody’s revised the State’s rating outlook from negative to stable and affirmed the Aaa rating. In its report entitled Moody's revises outlook to stable, affirms Aaa municipal ratings indirectly linked to US, Moody’s stated that the conditions that led to the return to a stable outlook on the U.S. government rating, which itself was revised by Moody’s on July 18, 2013, reduced the affected issuers’ (including Maryland) vulnerability to sovereign risk.
Thank you again for learning about Maryland’s general obligation bonds. To learn about future sales, periodically visit this site. In addition, other Maryland bond issuers may offer bonds in the interim. To see prospective sales dates, there is a Maryland bond sale calendar you can access here.
Continuing financial information for the State of Maryland general obligation bonds is available at http://www.treasurer.state.md.us/debtmanagement/continuing-disclosure.aspx and at http://emma.msrb.org, where market activity related to the bonds may also be found. General information on municipal bonds can be accessed at the Municipal Securities Rulemaking Board's Education Center, http://emma.msrb.org/EducationCenter/EducationCenter.aspx