For immediate release:  October 8, 2003
For more information:  Barton Potter (360) 902-9033

State bond sales earn attractive rates

OLYMPIA Wash. — Strong bidder interest in the sale Tuesday by the state of Washington of more than $200 million in bonds yielded very attractive interest rates, State Treasurer Michael J. Murphy said.

Two of the three issues were refunding (refinancing) sales, which allowed the Office of the State Treasurer to save almost $17.75 million compared to the original cost of financing the bonds in 1995.

“It’s gratifying to see so many companies bidding aggressively for our business,” said Murphy, who is chair of the State Finance Committee that met Tuesday to ratify the three bond issues. “We’re still working in an uncertain economy, but you can see from the interest rates that Washington state bonds are very attractive in the marketplace.”

In the sale that was not a refunding, 12 bidders stepped forward for the sale of $20 million in taxable State Housing Trust Fund bonds (Series 2004T). The State Finance Committee awarded the bid to UBS Financial Services with a true interest cost (TIC) bid of 1.9911285 percent.

Proceeds of the Housing Trust Fund bond sale supports construction or rehabilitation of more than 3,000 housing units in Washington each biennium. The short-term (two-year) nature of the housing bonds helped draw the large number of bidders, Murphy said.

Also bidding were Griffin, Kubik, Stephens (1.9927853 percent), Citigroup Global Market (2.0251449), Morgan Keegan & Co.(2.045312), RBC Dain Rauscher (2.0571175), Legg Mason (2.0666571), First Albany Corp. (2.0684555), Goldman, Sachs (2.1039065), Raymond James (2.156757), Lehman Brothers (2.1979831), Wells Fargo (2.3184719) and US Bancorp Piper Jaffray (2.3697381).

Merrill Lynch & Co. was the winning bidder for the sale of $125 million in various-purpose general obligation refunding bonds (Series R-2004A) with a TIC proposal of 4.149393 percent. Also bidding were Morgan Stanley (4.1561234 percent), UBS (4.1768189) and Citigroup (4.1898814).

Merrill Lynch was also the successful bidder in a sale of $57.9 million in motor vehicle fuel tax general obligation refunding bonds (Series R-2004B). Merrill Lynch offered a TIC bid of 4.1549787 percent. Also bidding were Morgan Stanley (4.1598045 percent), UBS (4.1907953) and Citigroup (4.1984438).

Refinancing the various-purpose bonds to take advantage of today’s low interest rates yielded gross savings of $11.2 million (6.68 percent) over the 1995 cost of the bonds. The refunding of the fuel tax bonds earned gross savings of $5.4 million (7.5 percent) over the 1995 financing cost.

Murphy chairs the State Finance Committee,which includes Gov. Gary Locke and Lt. Gov. Brad Owen.

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