Financing Takes Advantage of Low Rates to Save the State Millions

Olympia, WA – This week, the Office of the State Treasurer sold $75,190,000 million in Certificates of Participation (COP) in a competitive sale. Wednesday’s COP sale attracted strong interest, with bids from 10 institutions. Citigroup Global Markets Inc. submitted the winning bid, with the lowest true interest cost of 2.1189%.

The COP sale took advantage of the current low interest rate environment to refinance outstanding lease obligations for four state agencies and two school districts, providing a total of $4.94 million in gross savings. “I am very pleased that in this difficult time, my office was able to take advantage of low interest rates to save the state $4.8 million and local governments $102,899 in total debt service costs,” said Treasurer Duane Davidson.

In addition to the refinancing component, the sale also provided financing for 17 new projects for state agencies. Major projects financed with the proceeds of this sale include $27 million for Columbia Basin College’s Student Recreation Center and $9.5 million for South Seattle Community College to finance a Student Wellness and Fitness Center.

Finally, the sale also provided financing to 9 local governments, including two cities, five fire districts, and two counties through the state’s LOCAL program. The LOCAL Program partners with the State COP Program to provide low-cost financing for local governments three times per year. Some examples of the property financed on behalf these agencies in this COP sale include fire trucks, land acquisitions for a fire station, and HVAC upgrades for a county courthouse.

“The LOCAL Program helps ensure that even Washington’s smallest municipalities can access the market and benefit from the State’s low interest rates, low costs, and expertise,” said Treasurer Davidson. “We are happy to partner with these agencies each time we sell COPs.”