Thursday, June 13, 2024

Louisiana Bond Commission approves $265 million in borrowing

by BIZ Magazine

By David Jacobs | The Center Square

The Louisiana State Bond Commission on Thursday approved borrowing nearly $265 million for construction projects.

Citigroup Global Markets was the low bidder to facilitate the bond sale, offering an interest rate of about 2.175 percent. Some Republicans have urged state government not to do business with Citigroup because of what they describe as the global bank’s anti-Second Amendment policies.

The Bond Commission in February voted to exclude Citigroup from a list of eight favored banks to handle certain future bond sales, not including the bond sale approved Thursday.

“By law, anybody can bid [in a competitive bond sale], and we take the lowest bidder, no matter who the bank is,” said State Treasurer John Schroder, who chairs the Bond Commission.

Citigroup does not do business with companies that sell guns to people who are under 21 or haven’t passed a background check, or those that sell bump stocks or high-capacity magazines.

Commissioner of Administration Jay Dardenne accused Schroder of putting politics over getting state taxpayers the best deal relating to the February vote, while Schroder denied politics played a role in how he scored the banks.

“There you go, commissioner,” Schroder said Thursday, when Citigroup’s status as the low bidder was revealed, presumably referring to Dardenne.

The bonds will be paid back over 20 years at an average interest rate of about 2.175 percent.

Schroder said the state owes a total of about $4.5 billion, including about $1.5 billion for non-state projects. Many of the non-state projects are completed quickly, Schroder said, questioning the wisdom of paying interest for them over 20 years.

“In a state like Louisiana being a poor state, and we’re constantly looking for infrastructure money,” he said. “That’s where I get my heartburn.”

The Bond Commission also voted to move forward with refinancing some of the state’s existing debt, which an official said would save “a few million dollars.”

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