Competition Was Key to Successful Sale

BATON ROUGE, LA The Louisiana Department of the Treasury went online today to accept competitive bids on $252.5 million worth of general obligation state bonds at an interest favorable to the state, according to State Treasurer John Kennedy.

The state was able to borrow money at an interest rate of 4.68 percent, which compares favorably to the state’s last online bond sale where the state borrowed money at an interest rate of 5.19 percent.

We conducted our first electronic bond sale in November of 2000, and it was a tremendous success, said Treasurer Kennedy. We were pleasantly surprised when we did even better this time around.

Five investment firm syndicates used the Internet to compete for state bonds, and Salomon Smith Barney beat out bids from Lehman Brothers, Bear Stearns, Merrill Lynch and Morgan Keegan with its 4.68 percent interest rate.

Competition is good for the state, and we’ve seen this first-hand with both of our electronic bond sales, said Treasurer Kennedy. The state is able to borrow money at a better interest rate, because investors compete to offer the best price possible in order to get the bonds. The Internet also makes it easier for investors to try to out-bid one another which ultimately gets the state a better return on your tax dollars.

Proceeds from the electronic bond sale will fund approved capital outlay projects that will benefit education, local governments, transportation projects, public safety and corrections, and tourism, among other areas.

Contact:
Sarah Mulhearn
(225) 342-0012