A solid credit rating along with strong investor demand allowed the State Treasurer’s Office to finance several local and state government projects at low interest rates today.
“I’m pleased that our Office was able to leverage Washington’s historically strong financial standing to allow local governments to finance essential community services, like new fire equipment, an ambulance, a street sweeper, and a new recreation center, among other projects, at favorable interest rates as we rebuild our economy,” said State Treasurer Mike Pellicciotti. The financing will also help pay for multiple building upgrades for State agencies.
In connection with the issuance, Moody’s Investors Service maintained its strong Aa1 credit rating for the State’s Certificates of Participation program, 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 today’s sale.
The State Treasurer’s Office sold $51.07 million of Certificates of Participation in a competitive sale today that attracted strong demand, with bids from 12 financial institutions. HilltopSecurities submitted the winning bid, with the lowest true interest cost of 1.93%, which will result in interest rates of 0.48% to 2.11%, depending on term, for the governments participating in today’s sale.
The Certificate of Participation program, which is managed by the State Treasurer’s Office, provides Washington local governments and state agencies with an alternative way to finance essential real estate projects and equipment purchases over a multi-year period. The program is structured to ensure that State and local agencies benefit from economies of scale as well as the State’s strong credit ratings and low tax-exempt financing rates.
The State Treasurer’s Office has issued $1,440,590,000 through the program in the last decade and continues to provide the lowest possible financing costs to state and local government participants.