OLYMPIA – Today, with the backing of newly affirmed credit ratings, the Office of the State Treasurer (OST) received favorable interest rates and successfully sold $774 million in Various Purpose General Obligation Bonds, $220 million in Taxable General Obligation Bonds, and $298 million in MVFT and Vehicle Related Fees General Obligation Bonds in the state’s first competitive bond sale of 2026.
“Washington bonds remain an attractive investment thanks to Washington’s long-term fiscal stability,” said Washington State Treasurer Mike Pellicciotti. “Our credit ratings are the key to obtaining low interest rates, reducing interest payments on the state’s capital and transportation projects, and ensuring we’re able to withstand external economic pressures for an extended period of time.”
Projects expected to be financed with proceeds of the Series 2025C Bonds include K-12 school renewal and replacement projects, facilities for state universities and community and technical colleges, affordable housing, and various other capital expenditures. Series 2026D Bonds are authorized to be issued to provide funds to pay and reimburse state expenditures for construction of state and local highway improvement projects identified as Move Ahead Washington or Connecting Washington transportation projects or improvements. 2026T-2 (Taxable) are authorized to be issued to provide funds to pay and reimburse state expenditures for various capital purposes, including affordable housing, water supply and broadband improvement projects, and clean energy and basic infrastructure projects.
The nation’s top credit rating agencies recently affirmed Washington’s strong ratings, which contributed to the favorable interest rates the state received in today’s sale. Moody’s Ratings issued the highest possible rating of Aaa, while Fitch Ratings and S&P Global Ratings each maintained an impressive AA+ rating of the state.
Sale Summary:
Various Purpose General Obligation Bonds, Series 2026C
The $773,580,000 Series 2026C VPGO 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 two tranches, to be sold as more digestible “Bid Groups”.
The State received 6 bids for the $235,815,000 sold as Bid Group 1 (maturities 2035-2041). Underwriter BofA Securities submitted the best bid with a True Interest Cost (TIC) of 3.27%.
The State received 5 bids for the $537,765,000 sold as Bid Group 2 (maturities 2042-2051). Underwriter BofA Securities submitted the best bid with a True Interest Cost (TIC) of 4.45%.
On a combined basis, the $773,580,000 Series 2026C VPGO Bonds sold at an aggregate TIC of 4.16%. The final maturity date for Series 2026C VPGO Bonds is February 1, 2051.
General Obligation Bonds, Series 2026T-2 (Taxable)
The $220,120,000 GO bonds (Taxable) were issued to provide funds to pay and reimburse state expenditures for various capital purposes.
The State received 7 bids for MVFT/VRF GO bonds (maturities 2027-2035) with underwriter J.P. Morgan Securities submitting the winning bid with a True Interest Cost (TIC) of 3.98%.
MVFT/VRF GO Bonds, Series 2026D
The $297,960,000 MVFT/VRF GO bonds were issued to pay for transportation projects that are identified by the legislature in the biennial transportation budgets.
The State received 5 bids for MVFT/VRF GO bonds (maturities 2027-2051) with underwriter Wells Fargo Bank, National Association submitting the winning bid with a True Interest Cost (TIC) of 4.02%.