The state of South Carolina has borrowed the money it intends to give Boeing Co. to cover more than one-third of the cost of the aerospace giant's $750 million assembly plant for the 787 jet in North Charleston.
The state's treasury office recently closed on $270 million in bonds, which Boeing doesn't have to pay back.
The company plans to spend most of that -- $206.1 million -- on the 787 assembly building, which construction workers recently began framing out.
Boeing plans to spend another $10 million of bond money on roads and $53.9 million on site work and utilities, according a state Department of Commerce document.
In return, Boeing has agreed to hire at least 6,000 workers by 2016 at its Charleston International Airport campus. Roughly 3,000 workers already report to the site, where the company makes two key pieces of the 787 fuselage.
So far, Boeing has requested and received slightly more than $13.82 million of the $270 million in bond proceeds, Commerce Department marketing and communications manager Kara Borie said.
Three investment firms participated in the first debt issue: Banc of America Merrill Lynch, Citigroup Global Markets Inc. and Barclays Capital Inc.
This was the only planned bond issue from the state's portion of the Boeing incentive package.
The borrowing costs during the 15-year repayment period will amount to about $90 million, a figure that's smaller than what state officials originally expected to spend.
State treasury officials estimated in January that the total cost of the bonds, including premium and interest, would amount to $399 million. Instead, the cost is projected to be about $360 million.
The bonds carry an interest rate of 3.3 percent.
"Market conditions can change significantly in six months, and we did effect the sale under some very favorable market conditions," said Rick Harmon, senior assistant to state Treasurer Converse Chellis,
The debt will be repaid from the state's general operating fund.
Reach Katy Stech at 937-5549 or firstname.lastname@example.org.