The authoritative source on Colorado Governor Bill Ritter brought to you by the Editors at the Cherry Creek News and Denver Community Newspapers
Thursday, October 23, 2008
TREASURER, GOVERNOR ANNOUNCE $230M FOR COLLEGE CONSTRUCTION PROJECTS
Gov.Bill Ritterand State Treasurer Cary Kennedy today announced the successful sale of $231 million of Certificates of Participation to finance 12 construction projects at college campuses across the state.
"At a time of great national and international economic uncertainty and with the stock market still so unsettled, the successful sale of these C.O.P.'s demonstrates a tremendous amount of confidence inColorado," Gov. Ritter said. "These funds will stimulate our economy, create new jobs and allow us to invest in colleges and communities all acrossColorado."
"We are extremely pleased with the success of the sale," Treasurer Kennedy said. "Coloradois leading the nation in the loosening up of the credit markets. This means we are going to be able to pump millions of dollars intoColorado's economy."
The C.O.P.'s were authorized by Senate Bills 08-218 and 233 and House Joint Resolution 08-1042. The C.O.P.'s leverage Federal Mineral Lease revenue, which are revenues paid by energy companies that drill and extract oil and gas on federal lands in Colorado. The 12 projects to be funded with the C.O.P.'s:
1.University of NorthernColorado: Butler-Hancock Renovation ($11.6 million)
11. Front Range Comm. College, Larimer Campus: Science Classroom Project ($14.2 million)
12.FortLewisCollege: Berndt Hall Reconstruction, Professional Services ($3.2 million)
"This is something that both parties can get behind because keeping the construction going on these projects saves us money and will keep people working in these communities," said state Rep. Don Marostica, who serves on the legislature's Capital Development Committee. "All the way around, it's a win."
The Certificates of Participation were sold over two days (Wednesday and today), at an interest rate of 5.39 percent, with annual payments for 20 years. A C.O.P. offering is similar to that of a bond, with the most significant difference being that repayment is dependent on an annual appropriation.
Treasurer Kennedy said the state had worked to prepare the offering so it would be ready for when investor demand returned to a level that would support the deal. "We are getting the state one of the best rates for any comparable offering since the collapse of Lehman Brothers over a month ago," said Kennedy. "With this rate, we have saved the state more than $17 million. This is a testament toColorado's strong financial position."
According to the Treasurer's Office, of the $231 million sale, there was demand for $143 million by retail investors, 80 percent of whom areColoradoresidents.Coloradoresidents get an exemption from state and federal taxes on the interest they receive when they purchaseColoradomunicipal offerings.