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Refinancing Translates Into Reduced Rents and Debt Service Savings for the State

1500 Jefferson

OLYMPIA, WA – State Treasurer Duane Davidson and his staff took the lead in the refunding of $227,875,000 worth of lease revenue bonds that will close next Tuesday, and result in over $71.1 million of total debt service savings for the State.

With coordination between the Office of the State Treasurer, Washington Technology Solutions (WaTech), the Office of Financial Management (OFM), and FYI Properties, Treasurer Davidson oversaw the issuance of the bonds, which, thanks to aggressive pricing spreads and favorable market conditions, will produce annual debt service savings to the State of more than $3.5 million.

“This refinancing, which my team worked on for over a year, translates into reduced rents for building tenants and is going to save the State a lot of money,” Treasurer Davidson said.” The refunding will save the State $54 million in debt service costs on a net present value basis, or more than 20.2% savings over the next 20 years when compared to the original 2009 Bonds.

The new bonds fund the defeasance of the 2009 FYI Properties Lease Revenue Bonds, originally sold to finance the design, construction, and furnishing of the 1500 Jefferson Building in Olympia. FYI Properties is a Washington nonprofit organization that issued the bonds on behalf of the State as 63-20 Lease Revenue Bonds.

The bonds were sold over a two-day negotiated sale, by an underwriting syndicate led by Bank of America Merrill Lynch as senior manager, Barclays Capital as co-senior, and Citigroup and Morgan Stanley as co-managers. The first day was dedicated to individual and professional retail investors with the second day of the sale primarily dedicated to institutional investors.

The 1500 Jefferson Building, located on the Wheeler block east of the Capitol Campus in Olympia, is an office building and data center. The building is occupied by WaTech; the Department of Enterprise Services; the Office of Financial Management; and the Department of Children, Youth and Families.