CHICAGO -- Gov. Tommy Thompson of Wisconsin on Friday signed into law a bill that increases the state's bond refunding authority by $450 million, to $ 1.3 billion.
Frank Hoadley, the state's capital finance director, said Wisconsin has not set a timetable for refunding the $450 million of general obligation debt, which could save the state $13.5 million.
"We recognize that the market is not as good today as it was at the end of July," Mr. Hoadley said. "But we now have the authority to act on opportunities. This is just a necessary step."
He added that the legislation was necessary because the state exhausted its $853 million of authorization when it issued $449 million of refunded debt in February. That refunding saved the state $13.4 million, he said.
Mr. Hoadley said the Legislature failed to act this spring on a suggestion his office to increase the state's refunding authority.
However, his office decided to resubmit the proposal after seeing the favorable market conditions that greeted the state' sale of $300 million of refunded transportation revenue and new-money bonds, Mr. Hoadley said.
"With the extremely hot market at the end of July when we were just finishing the major transportation deal, we turned around and looked again at our general obligation refunding opportunities," Mr. Hoadley said.
The bill for the new refunding authorization was passed unanimously by the Legislature last week.
Underwriters for the upcoming refunding have not yet been chosen, Mr. Hoadley said.
However, he added that the Wisconsin Building Commission was expected to approve the same underwriting team that worked on the February refunding. Those firms were Bear Stearns & Co., senior underwriter; and co-managers Robert W. Baird & Co., M.R. Beal & Co., Dain Bosworth, First Chicago Capital Markets, Kemper Securities Inc. Lehman Brothers, Merrill Lynch & Co., Morgan Stanley & Co., and B.C. Ziegler & Co. He said the commission may choose a new senior manager for the new deal.
Mr. Hoadley added that the specific bonds targeted for refunding would be disclosed when the deal is officially announced.