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State Treasurer Locks-in Low Interest Rates in Financing for State Agencies and Five Local Governments

Legislative Building in Olympia, WA

OLYMPIA – The Office of the State Treasurer (OST) created over $80,000 dollars in interest savings for the state of Washington by refinancing $1.28 million in outstanding debt. Savings achieved today can be attributed to favorable interest rates and to Washington’s recently affirmed Certificates of Participation (COPs) credit ratings from Moody’s.

Peninsula College partnered with OST in today’s sale of COPs to refinance outstanding debt issued to pay for the construction of a satellite campus in Forks, WA. Refinancing their outstanding principal at today’s lower rate of 2.89% will allow Peninsula College to save approximately $9,000 annually, which turns out to be a total savings of about $82,870 over the life of the borrowing.

By proactively refinancing transactions like this, OST helped reduce the state of Washington’s Bond and COP debt service costs by $489 million, on a net present value basis since January 2021.

“We’re making good use of the state’s strong credit ratings to reduce long term interest costs for the state of Washington and our local government partners,” said State Treasurer Mike Pellicciotti. “This is just one small example of how leveraging Washington’s strong financial position provides value by empowering local partners and directing money towards community projects.”

In addition to refinancing Peninsula College’s outstanding debt, today’s sale of COPs helped five local governments obtain financing for critical purchases and construction projects through OST’s Local Option Capital Asset Lending Program (LOCAL Program), which pools financing requests from state agencies and local governments into a publicly sold security.

One of these LOCAL Program participants, the Granite Falls School District, is financing the construction of a new athletic field turf and track at Granite Falls High School using financing obtained through the LOCAL Program. This will enable the Granite Falls School District to pay for the project over time without impacting any other district programs, according to Granite Falls School District Director of Business Operations Marshall Kruse.

“The new turf field is a much needed upgrade for Granite Falls High School,” said Kruse. “Our current field has lasted 15 years (3 more than what is typically expected) and is at the very end of its lifespan. The track and field upgrade would likely not have been possible if it were not for low borrowing costs achieved through the LOCAL Program in partnership with the State Treasurer’s Office,” he said.

In Fiscal Year 2022, COPs issued by the Treasurer’s Office helped local municipalities and state agencies obtain $108,785,000 in financing. Up until today’s sale, in Fiscal Year 2023 OST helped finance $35,160,000 in property and equipment financed at the lowest possible cost for state and local COPs participants across Washington.