OLYMPIA – Bolstered by the State’s outstanding credit ratings, the Office of the State Treasurer (OST) today sold more than $1.3 billion in bonds to finance a broad range of capital and transportation projects, while refinancing previously issued debt to save $37.3 million in future debt costs. The four series of bonds were sold in a competitive bidding process to achieve the lowest possible interest rates.
“Once again our team at OST has set a high standard to ensure financing for Washington projects are delivered efficiently at competitive rates on behalf of taxpayers while seizing every opportunity to refinance previously issued bonds to further reduce debt costs,” said State Treasurer Mike Pellicciotti. “Investors continue to see Washington as a sound investment thanks to our state’s effective budgeting practices, strong economy, and well-funded pensions.”
Credit rating agencies affirmed Washington’s strong credit ratings leading up to today’s bond sale, which contributed to the favorable interest rates achieved. Moody’s Investors Service again issued the highest possible rating of Aaa, while S&P and Fitch separately issued remarkable AA+ ratings to the State of Washington.
S&P also noted a ‘Positive Outlook’ in its ratings affirmation, indicating a one-in-three chance they could upgrade Washington’s credit rating over the next two years. Keys to the rating from S&P included Washington’s resilient and diverse economic base, sales tax-based revenue structure, strong financial policies and practices, and strong pension funding discipline.
Sale Summary:
Various Purpose General Obligation Bonds, Series 2025A
The $822,015,000 VPGO bonds were issued in two bid groups to pay for a wide range of state capital projects including K-12 school renewal and replacement costs, facilities for state universities and community and technical colleges, state facilities projects, affordable housing units, water supply, flood protection, habitat conservation and rehabilitation projects, outdoor recreation facilities, riparian protection projects, and farmland preservation.
Bid Group 1 - $381,715,000 VPGO Bonds
The State received six bids for the VPGO Bonds Bid Group 1 (maturities 2027-2040) with underwriter BofA Securities submitting the winning bid with a True Interest Cost (TIC) of 3.38%.
Bid Group 2 – $440,300,000 VPGO Bonds
The State received six bids for the VPGO Bonds Bid Group 2 (maturities 2041-2049) with underwriter BofA Securities submitting the winning bid with a True Interest Cost (TIC) of 4.24%.
Motor Vehicle Fuel Tax and Vehicle Related Fee General Obligation (MVFT/VRF GO) Bonds, Series 2025B
The $206,670,000 MVFT/VRF GO bonds were issued to pay for a slate of State and local highway improvement including the interchange at Interstate 90 and State Route 18 and the location, design, and construction of projects included in the Connecting Washington transportation package authorized by the State Legislature in 2015.
The State received six bids for MVFT/VRF GO bonds (maturities 2025-2049) with underwriter J.P. Morgan Securities submitting the winning bid with a True Interest Cost (TIC) of 3.96%.
General Obligation Bonds (Taxable), Series 2025T
The $45,040,000 General Obligation Bonds were issued to fund various state capital projects for affordable housing units, water supply, broadband, clean energy, and basic infrastructure projects.
The State received ten bids for the GO Bonds (maturities 2025-2027) with underwriter FHN Financial Capital Markets submitting the winning bid with a True Interest Cost (TIC) of 4.79%.
Various Purpose General Obligation Refunding Bonds, Series R-2025A
The $286,120,000 VPGO Refunding Bonds were issued to refinance $311,945,000 of previously issued bonds. The refunding saves the state $37.3 million in future debt costs, or $29.3 million on a net present value (NPV) basis.
The State received six bids for the VPGO Refunding Bonds with underwriter J.P. Morgan Securities LLC submitting the winning bid with a True Interest Cost (TIC) of 3.29%.