OLYMPIA – The Office of the State Treasurer refinanced $864,040,000 of previously issued bonds today, using the state’s strong credit ratings to lock-in lower interest rates and save millions in debt service costs. Upon finalizing the transaction, which generated $92.4 million in savings, OST’s refinancing strategies will have produced approximately $970.3 million in total net present value savings since the beginning of 2021.
“Today’s sale demonstrates once again the tremendous value proposition for taxpayers and budget writers of maintaining Washington’s high credit ratings,” said State Treasurer Mike Pellicciotti. “My office has effectively leveraged our ratings to produce nearly one billion dollars of savings for our state since the beginning of my first term. Our ratings keep debt costs low, but most importantly, the state’s strong credit unlocks the ability to keep tax dollars in state and working for the people of Washington.”
Despite challenges in recent budget cycles, Washington retains excellent ratings, with Moody’s recently issuing the highest possible rating of Aaa, and both Fitch Ratings and S&P Global Ratings maintaining impressive AA+ ratings. However, Moody’s and Fitch both revised their outlook for the state from Stable to Negative in rating reports issued in connection with today’s bond sale.
In spite of the outlook revisions, the state’s credit ratings remain strong, helping OST to refinance nearly $10.1 billion of callable bonds since 2021, generating a total of $970.3 million in total net present value savings.
Sale Summary:
Various Purpose General Obligation Refunding Bonds, Series R-2026C
The $548,710,000 Series R-2026C VPGO Refunding Bonds are being issued to refinance $598,640,000 of previously issued bonds used to pay for various state 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 8 bids for the $124,660,000 sold as Bid Group 1 (maturities 2026-2029). Underwriter BofA Securities submitted the winning bid with a True Interest Cost (TIC) of 2.606%.
The State received 6 bids for the $424,050,000 sold as Bid Group 2 (maturities 2030-2041). Underwriter Morgan Stanley & Co, LLC submitted the winning bid with a True Interest Cost (TIC) of 3.300%.
On a combined basis, the $548,710,000 Series R-2026C VPGO Refunding Bonds sold at an aggregate TIC of 3.250%. The final maturity date for Series R-2026C VPGO Refunding Bonds is August 1, 2041.
Motor Vehicle Fuel Tax and Vehicle Related Fees General Obligation Refunding Bonds, Series R-2026D
The $241,870,000 Series R-2026D MVFT/VRF GO Refunding Bonds were issued to refinance $265,400,000 of previously issued bonds used to pay for various highway improvement projects.
The State received 6 bids for the MVFT/VRF GO refunding bonds (maturities 2026-2041) with underwriter Morgan Stanley & Co, LLC submitting the winning bid with a True Interest Cost (TIC) of 3.167%.
A previous version of this release included preliminary figures. This corrected version reflects final sales numbers.