The Office of the State Treasurer achieved strong investor interest and low interest rates in the sale of more than $707.5 million of Various Purpose General Obligation Bonds, and $140 million of General Obligation Bonds (Taxable) on Tuesday thanks in part to Washington’s newly affirmed strong credit ratings.
“The attractive interest rates that my office locked in today will help Washington state keep its educational and infrastructure projects on track,” said State Treasurer Pellicciotti. “Washington state bonds are in demand because we have responsible government that has consistently demonstrated a focus on the future.”
Last week, the three largest credit rating agencies announced they will maintain Washington’s strong credit ratings, which contributed to the low interest rates the state achieved for this week’s bond sale. Moody’s Investors Service issued the highest possible rating of Aaa to Washington. Similarly, Fitch maintained their impressive AA+ rating of the state, according to their full report. S&P also maintained their AA+ rating.
Proceeds from this week’s bond sale will be used to fund approximately six months of capital budget project expenditures, including capital expenditures for K-12 public schools, higher education, conservation and rehabilitation, and other state managed programs.
Sale Summary:
Various Purpose General Obligation Bonds, Series 2023A
- The $707,500,000 VPGO Series 2023A bonds are being issued to provide funds to pay and reimburse state expenditures for various capital projects. Due to its large size, the bonds were divided into three tranches, to be sold as more digestible “Bid Groups”.
- The state received 6 bids for the $243,375,000 sold as Bid Group 1 (maturities 2029-2037). Underwriter Citigroup Global Markets Inc. submitted the best bid with a True Interest Cost (TIC) of 3.032647%.
- The state received 6 bids for the $250,300,000 sold as Bid Group 2 (maturities 2028-2043). Underwriter Morgan Stanley & Co, LLC submitted the best bid with a TIC of 3.869208%.
- The state received 6 bids for the $213,825,000 sold as Bid Group 2 (maturities 2044-2047). Underwriter BofA Securities submitted the best bid with a TIC of 4.124259%.
- On a combined basis, the $707.5 million Series 2023A bonds sold at an aggregate TIC of 3.724787%. The final maturity date for Series 2023A is August 1, 2047.
General Obligation Bonds, Series 2023T (Taxable)
- The state received 8 bids for the $140,130,000 General Obligation Bonds, Series 2023T (Taxable), which have a final maturity date of August 1, 2029. Underwriter J.P. Morgan Securities LLC submitted the best bid with a TIC of 3.466223%.