Today at 4:42 PM

--- PRESS RELEASE ---

For Immediate Release

June 25, 2014 Contact: Jeremy Sampson, Treasury (517) 335-2167
Sara Wurfel, Governor (517) 335-6397
Kelsey Hartung, Berg Muirhead and Associates (313) 872-2202
Michigan Finance Authority Successfully
Sells Bonds on Behalf of the Public
Lighting Authority
Permanent Financing Allows for Completion of Street Lighting Project
in the City of Detroit
The Michigan Finance Authority (MFA) Wednesday sold $185 million in bonds on
behalf of the Public Lighting Authority (PLA) through its Local Government Loan
Program to complete the funding necessary to relight the streets of Detroit.
The long-term, fixed rate financing refunded the $60 million interim financing sold in
December 2013 and provides additional funds for the completion of the street lighting
project. The issuance received strong investment grade ratings of A-from Standard
and Poors and BBB+ from Fitch. Both agencies highlighted the legal and statutory
strengths of the transaction.
Lighting is an essential component to revitalizing Detroit, said Governor Rick
Snyder. Not only is it important to public safety, but it is a demonstration of the real
improvements happening in the City every day.
The interim financing has allowed for the construction of 9,000 new street lights to
date. The remaining 55,000 will be funded from this issuance.
As anticipated, investors did their homework and demonstrated an appreciation for the
credit strength of our deal, said Odis Jones, Chief Executive Officer of the
PLA. Every week we are adding 500 state of the art, LED lights throughout the
City. As a result the new system will be far more reliable and energy efficient than
what was here before. We are investing in the latest technology to ensure the system is
built to last for our citizens.
Investor demand was robust across the transaction, which was 2.5 times
oversubscribed, allowing yields to be lowered during the pricing process. 35 separate
institutions and several dozen individual retail accounts placed orders for the bonds,
resulting in an all-in interest cost of 4.53% for the 30-year transaction.
This project has been a priority for the state, and the MFA was proud to have assisted
the PLA to reach its financing goals, said Joseph Fielek, Executive director of the
MFA. It was important to us to find a long-term solution at a low cost, and we have
achieved those objectives. It highlights the ability of communities to finance essential
projects during financially challenging times if a bond issuance is well structured.
The MFA offers effective low-cost financing to public and private agencies providing
essential services to the citizens of Michigan, including municipalities, healthcare
providers, public, private, and charter schools, higher education and loans to college
students.
Citibank served as the senior manager on the transaction and BMO and Loop Capital
were co-managers. Dickinson Wright served as Bond Counsel to the MFA and Miller
Canfield served as Bond Counsel to the PLA. Robert W. Baird & Co. served as the
Municipal Advisor.
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