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Oct. 4 (Bloomberg) -- Tennessee, with a 9.7 percent unemployment rate that tops the national average, will offer its largest bond sale ever as early as next week to help finance a plant for German automaker Volkswagen AG.
The $585 million general-obligation offering is to fund economic development projects for job creation, Mary-Margaret Collier, director of the Comptroller’s Division of State and Local Finance, said in a telephone interview from Nashville.
The proceeds will help build plants for Volkswagen; Wacker Chemie AG, a German chemical company, and Michigan-based Hemlock Semiconductor Corp., a silicon manufacturer. The state estimates that the projects could bring as many as 4,600 jobs, with additional jobs created from ancillary development such as automobile parts suppliers, Blake Fontenay, a spokesman for Comptroller Justin P. Wilson, wrote in an e-mail.
The deal includes $106 million of refunding bonds that will save the state more than $10 million in total interest costs, Collier said.
Moody’s assigned an Aaa rating to the bond sale, its highest grade, and gave it a negative outlook because of the state’s dependency on federal aid. Tennessee’s largest borrowing to date was for $390 million in 2009, according to Fontenay.
--With assistance from Michelle Kaske in New York. Editors: Walid El-Gabry, Jerry Hart
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