Oregon Selling Bonds Again

The State’s bond calendar for the remainder of the 2005-07 biennium is full of projects authorized in the last legislative session, including prison construction, housing, transportation, energy loans, and home loans for veterans.

Photo: Kevin Hays

(SALEM) - State Treasurer Randall Edwards has announced that the State of Oregon is back in the bond market after the defeat of Ballot Measure 48 at the ballot box November 7th.

Because of the uncertainty and potential financial impact of Measure 48, on September 1st Treasurer Edwards had suspended $1.3 billion in state bond sales pending the outcome of the election.

“It is a great day for Oregon that we are back in the market selling bonds to invest in the State.

These bond sales help Oregon’s economy by providing jobs and improving our roads, bridges, and other transportation hubs. They also help ensure we help veterans and low-income families with housing,” said Edwards.

“I am especially pleased that our first sale was to invest in alternative energy projects and help make Oregon more energy independent.”

The State priced last week a $27.95 million general obligation bond issue for the Oregon Department of Energy’s Loan Program at record low interest rates. The bonds will finance:

(1) A $20 million loan for a portion of the Cascade Grain ethanol production facility under construction near Clatskanie in Columbia County. The facility is designed to use approximately 40 million bushels of corn to produce over 100 million gallons of denatured ethanol per year. In addition, byproducts of the production process will be sold as livestock feed, and carbon dioxide will be sold to food and beverage companies.

(2) A loan of approximately $5 million for a portion of the costs of construction and installation of a wood pellet production line at the Bear Mountain Forest Products facility in Brownsville. The production line is being designed to use biomass heat to produce wood pellets from sawdust and wood shavings.

(3) The balance of the proceeds is expected to finance a variety of energy improvement, conservation, and renewable energy projects for businesses and individuals in Oregon and to pay the costs of issuing the bonds.

The bonds were sold in two series, with the larger portion funding the Clatskanie and Brownsville projects.

This series was sold on a tax-exempt basis, but subject to the alternative minimum tax, or AMT. The all-in cost of funds for this series was 4.26%. The balance of the funds was sold on a taxable basis at 5.45%.

Last week, the Oregon Housing & Committee Services began again accepting new applications for the Oregon Bond Loan Program, a first-time homebuyers program for low- and moderate-income families funded through self-supporting revenue bonds.

The next State bond sale scheduled is for the week of November 27th, $40 million in general obligation bonds for the self-supporting Oregon Veteran Home Loan program of the Oregon Department of Veterans Affairs.

The program provides low-interest home loans and home improvement loans to eligible veterans.