Washington State Treasurer Mike Pellicciotti approved the sale of three series of bonds today, delivering over $950 million in proceeds, which will be used to finance major infrastructure and transportation projects throughout the state. Proceeds from these bonds will pay for a portion of the construction costs of a new ferry for Washington’s long-planned plug-in hybrid-electric fleet, all at near-historically low-interest rates.
Last week, the leading credit rating agencies affirmed the State of Washington’s strong credit ratings, including a top Aaa rating from Moody’s. Today, the Treasurer’s Office took advantage of the current market conditions and Washington’s economic strength to finance these projects.
“Locking in these low-interest rates now will save Washingtonians money for decades to come, while allowing our state today to improve schools, upgrade its aging highways and modernize its ferry fleet,” said State Treasurer Mike Pellicciotti. “The ambitious effort of switching to renewable energy in powering the next generation of vessels is going to be the key for our state to lead by example as we address climate change.”
Today’s sale includes $35,547,000 to reimburse expenditures for the construction of the state’s first plug-in hybrid-electric Olympic class ferry vessel that is scheduled to begin serving Clinton-Mukilteo within the next five years as outlined in the Washington State Ferries System Electrification Plan.
A major portion of today’s bond proceeds will provide funding for school construction assistance and K-3 class size reduction.
Additionally, some of the bonds issued today will provide funds to cover state expenditures for construction of state and local highway improvements and preservation projects that are identified by the Legislature in the biennial transportation budgets, including improvements to State Route 99 through Seattle and to Interstate 90 at Snoqualmie Pass East.
“I’m particularly proud of the role of our Treasurer’s Office in securing the funds that the Legislature has allocated to improve our state’s infrastructure and address climate change issues with new hybrid-electric technology. We were able to time these transactions in a way that moves the state closer to achieving its long-term goals at the lowest possible cost,” Said Treasurer Pellicciotti.
Sale Summary:
Various Purpose GO Bonds, Series 2022A
The $599,490,000 VPGO Series 2022A bonds are being issued to provide funds to pay and reimburse state expenditures for various capital purposes. Due to its large size, the bonds were divided into two tranches, to be sold as more digestible “Bid Groups”.
The State received 8 bids for the $316,035,000 sold as Bid Group 1 (maturities 2027-2039). BofA Securities submitted the best bid with a True Interest Cost (TIC) of 1.85%.
The State received 8 bids for the $282,395,000 sold as Bid Group 2 (maturities 2040-2046). Wells Fargo Bank, National Association submitted the best bid with a TIC of 2.95%.
On a combined basis, the $599,490,000 million Series 2022A bonds sold at an aggregate TIC of 2.49%. The final maturity date for Series 2022A is June 1, 2046.
MVFT GO Bonds, Series 2022B
The State received 6 bids for the $42,325,000 MVFT GO Bonds, Series 2022B, which have a final maturity date of June 1, 2046. BofA Securities submitted the best bid with a TIC of 2.45%.
General Obligation Bonds, Series 2022T (Taxable)
The State received 12 bids for the $ 93,050,000 General Obligation Bonds, Series 2022T (Taxable), which have a final maturity date of August 1, 2027. J.P. Morgan Securities LLC submitted the best bid with a TIC of 0.64%.