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On March 2 and March 5, 2012, the State offered first priority to Maryland residents in the sale of $56,085,000 of 2012 First Series A General Obligation Bonds. The State expects to again offer first priority of general obligation bonds in late July or early August 2012. Please continue to visit www.buymarylandbonds.com for further updates.
If you are interested in these bonds, you may want to know what Maryland does with the proceeds from the bond sale, 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 2012 recognition of Maryland's public education system as the highest ranking in the country by Education Week for the fourth straight year.
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 eight states with AAA ratings from all three rating agencies. The states are Maryland, Delaware, Virginia, North Carolina, Georgia, Missouri, Iowa, and Utah. On February 22 and February 23, 2012 Moody’s Investors Service, Standard & Poor’s (S&P) and Fitch Ratings all affirmed the State’s AAA rating.
Moody’s has assigned a negative outlook to Maryland's General Obligation Bonds. In its latest confirmation of Maryland's Aaa rating dated February 22, 2012, Moody's stated that the negative outlook on Maryland's Aaa rating is due to Maryland's indirect linkages to the weakened credit profile of the U.S. government, which was assigned a negative outlook by Moody's on August 2, 2011. Moody's believes that Maryland's rating could be affected by a downgrade of the U.S. government's rating. Moody's further stated that in the coming weeks Moody's will assess Maryland's degree of vulnerability to sovereign risk in terms of its reliance on capital markets, dependence on federal revenues, sensitivity to macroeconomic cycles, and available financial resources to offset risks related to the U.S. government, in order to determine whether to maintain the negative outlook.
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