Washington State’s Green Bond Sale Shows Investors Value Conservation

Washington State's Green Bond Sale Shows Investors Value Conservation

(Updated May 25, 2017). On Monday, investors bought $51.1 million in Washington State Green Bonds, the first time they have been offered by the State. Proceeds will be used for salmon habitat restoration through the removal of fish passage barriers, the installation of solar panel systems to generate more renewable energy, the improvement of forest health, and other environmentally beneficial projects. Washington residents purchased over forty percent of the bonds sold in this national retail sale. State Treasurer James McIntire said Monday’s sale demonstrates investor interest in supporting projects that improve our environment.

“These results demonstrate the value Washingtonians place in protecting our natural surroundings,” McIntire said. “By supporting these programs now, we are planning for a future in a cleaner, greener, more sustainable Washington State.”

Also on Wednesday, the State received attractive bids for all four of its competitive bond sales. McIntire said that today’s sale exhibits strong demand for the State’s credit. “We’re extremely happy with today’s bids,” McIntire said. “These results recognize the continued improvements to our economy as well as the State’s strong financial practices, commitment to sound debt management and solid liquidity.”

All three rating agencies reaffirmed the State’s strong credit ratings (Aa1/AA+/AA+) with a stable outlook.

Series 2016A-2, subsequently summarized in an April 2016 OST report, encompasses the Green Bonds allocations, which are spread across several categories:

  • Protection of Puget Sound rivers, lakes, streams and aquatic lands;
  • Habitat conservation;
  • energy efficiency and conservation;
  • and clean water.

Representative projects included:

  • Mima Creek riparian restoration in Thurston County;
  • watershed assessment and conceptual restoration plan development for Asotin County tributaries of the Snake River;
  • funds to complete Foothills National Recreation Trail in Pierce County;
  • and funding for project development and water rights acquisition to enhance flows and mitigate development within the Dungeness River Basin.

Other bond sales – not Green Bonds – which also occurred in Fall, 2015, covered different types of state projects.

The $445.86 million Series 2016A-1 were to finance statewide work including K-12 school remodel and replacement projects, and new facilities for universities and community colleges.

Proceeds from the $189.34 million Series 2016B were to fund important transportation projects like I-5 HOV lane construction in Pierce County, additional lanes on I-405, and improvements to I-5 in Lewis and Cowlitz counties and I-90 at Snoqualmie Pass.

The $60.71 million Series 2016T taxable sale was to sustain construction and loan programs supporting low income housing developments as well as energy efficiency and renewable energy projects.

The $193.78 million Series R-2016A refunding bonds were to refinance existing state debt, saving taxpayers $25.8 million for the state’s general fund and freeing up $5.39 million for the current general fund state budget.

J.P. Morgan Securities was the lowest of 5 bidders for the Series 2016A-1, Various Purpose General Obligation Bonds, at a true interest cost (TIC) of 3.6 percent. Bank of America Merrill Lynch was the lowest of 5 bidders for the Series 2016B, Motor Vehicle Fuel Tax General Obligation Bonds, at a TIC of 3.49 percent. J.P. Morgan Securities came in with the lowest of 11 bids for Series 2016T taxable general obligation bonds at a TIC of 1.53 percent. Bank of America Merrill Lynch won with the lowest of 5 bids for series R-2016A refunding various purpose general obligation bonds with a TIC of 1.59 percent.