This morning, the Office of the State Treasurer sold $14.79 million in Certificates of Participation (COPs) in a competitive sale. Washington State’s COP sale attracted strong demand, with bids from 14 financial institutions. Hilltop Securities submitted the winning bid, with the lowest true interest cost of 0.54% (TIC). This is the lowest TIC for a Washington State new money COP transaction since the program started in 1991.
The Treasurer’s Certificates of Participation program provides Washington Local Governments and State agencies with an alternative way to finance essential real estate and equipment over a multi-year period. The program is structured to ensure that State and local agencies benefit from economies of scale and the State’s low tax-exempt financing rates.
Proceeds of the sale will help local governments acquire new school buses, fire engines, ambulances, hospital equipment, and the construction of a new fire apparatus building, and also finance multiple property acquisitions for State agencies.
“I would like to thank my office’s debt division for managing today’s competitive COP sale, which resulted in such low interest rates. This helps local governments and saves money for our State’s future generations. Today’s competitive bidding process shows that there is strong demand to invest in Washington State,” said State Treasurer Mike Pellicciotti.
In connection with the issuance, Moody’s Investor Service affirmed its strong Aa1 credit rating for the State’s COPs, noting the positive underlying fundamentals of Washington’s economy as factor. Moody’s also identified Washington’s sizable reserves entering the current downturn, strong governance practices and manageable long-term liabilities as factors in affirming the ratings for the State’s COP sale. Next week, the State will issue three separate series of General Obligations Bonds, which will carry ratings of Aaa from Moody’s, AA+ from Fitch, and AA+ from Standard and Poor’s.
The State Treasurer’s Office has issued $1,452,700,000 through the COP Program in the last decade and continues to provide the lowest possible financing costs to state and local government participants.