OLYMPIA – In the second largest one-day refinancing in state history, Washington Treasurer Mike Pellicciotti today successfully negotiated a bond sale that saved over $150 million dollars to the State of Washington. With Washington's well-funded reserves, sound financial position and prudent fiscal governance practices, the Office of the State Treasurer (OST) received affirmation of the state’s strong credit ratings leading up to today’s refunding sale of more than $1.6 billion in bonds. The bond refunding sale included $891.4 million of Various Purpose General Obligation (VPGO) Refunding Bonds, and $659.2 million of Motor Vehicle Fuel Tax and Vehicle Related Fees (MVFT/VRF) General Obligation Refunding Bonds. This sale by the State Treasurer effectively refinances existing state debt and will save Washington approximately $153.1 million in net present value.
“Despite increased volatility in the bond market, Washington bonds continue to remain attractive to investors,” said State Treasurer Mike Pellicciotti. “The state’s sound financial practices strengthens our position for high credit ratings, keeps investors coming back to invest in Washington, achieves lower interest rates, and affords us the ability to refinance earlier issued bonds to provide huge savings to the people of Washington.”
Leading up to this week’s sale, the nation’s top credit rating agencies again affirmed Washington’s ratings, which contributed to the favorable interest rates the state achieved. Moody’s Ratings issued the highest possible rating of Aaa, while S&P and Fitch separately issued AA+ ratings to the state of Washington.
Various Purpose General Obligation Bonds provide funds for various state capital budget projects. Motor Vehicle Fuel Tax and Vehicle Related Fee General Obligation Bonds provide funds for transportation projects authorized by the Legislature. The bonds sold today refinance previously issued bonds and generate savings to the state through reduced interest costs.
Backed by strong credit ratings, OST has refinanced nearly $8.0 billion of callable bonds since 2021, generating $732.7 million in net present value savings. The largest refinancing by the Office of the State Treasurer was in 2023, when Treasurer Pellicciotti refinanced earlier bonds to save $160.7 million. In terms of timing, due to federal restrictions imposed by the Tax Cut and Jobs Bill, signed into law by President Trump in 2017, this fall was the soonest the outstanding bonds were eligible for a current refunding.
Sale Summary:
Various Purpose General Obligation Bonds, Series R-2025B (negotiated)
The $891,395,000 VPGO Refunding Bonds were issued to refinance $976,745,000 of previously issued bonds used to pay for various state capital projects.
Motor Vehicle Fuel Tax and Vehicle Related Fee General Obligation (MVFT/VRF GO) Bonds, Series R-2025C (negotiated)
The $659,205,000 MVFT/VRF GO bonds were issued refinance $713,570,000 of previously issued bonds used to pay for transportation projects.
Underwriting Syndicate
The refunding bonds were sold via negotiated sale by the following syndicate:
Senior Manager: BofA Securities
Co-senior Manager: J.P. Morgan
Co-Manager: Barclays
Ramirez & Company, Inc.
Morgan Stanley
Jefferies
Wells Fargo Securities