Maryland has sold $100 million in general obligation bonds at a 6.37 percent interest rate to a syndicate of financial institutions led by Merrill Lynch Capital Markets and Bankers Trust of New York.
Proceeds from yesterday's sale will be used to fund $36.8 million for general state construction; $37.5 million for public school building projects; $3 million for higher education facilities; $8 million for water quality projects; $1.4 million for jails and other correctional buildings; and $13.3 million for a variety of state and local projects, including senior centers, museums, camps, flood-management programs and historical renovation.
The bonds will be sold to the public in denominations of $5,000. They are scheduled to mature beginning July 15, 2002.
State Comptroller Louis L. Goldstein said Merrill Lynch's winning bid, the lowest of five opened at a noon ceremony in Annapolis, was "right in the ballpark" for the bonds, which have the coveted Triple-A rating from the country's major bond-rating houses.
Maryland remains one of four states to retain the Triple-A rating, despite economic hardships brought on by the recession.
Among the five bids opened yesterday was one by a syndicate led by Alex. Brown & Sons of Baltimore.
Gov. William Donald Schaefer used the occasion of the sale to call on state lawmakers to reconsider their rejection last session of his efforts to restructure Maryland's tax system.
Recent transfers of funds from the state's emergency money accounts to balance the fiscal 1991 budget left the state with no reserves.
Schaefer said the state needs more revenues to absorb future financial demands on the budget. The fiscal 1992 fiscal budget already faces revenue shortfalls of about $200 million to $300 million, according to fiscal experts.
Without new sources of revenues, Schaefer said, Maryland risks losing its Triple-A bond rating. The high rating alows the state to repay bonds at low interest, saving taxpayers significant amounts of money.