State Treasurer Secures Impressive Bond Ratings as Washington State Seeks to Finance Future Projects
OLYMPIA – State Treasurer Mike Pellicciotti received confirmation this week that Washington will maintain its impressive bond ratings ahead of next week’s scheduled sale of approximately $707 million of Various Purpose General Obligation Bonds, and $140 million of General Obligation Bonds (Taxable).
“Affirmation of the state’s strong credit ratings, including Moody’s outstanding ‘Aaa’ rating, affords us the opportunity to take state bonds to market with confidence that we will receive some of the lowest interest rates possible,” said Treasurer Pellicciotti. “Every dollar we save will be better spent right here in Washington, rather than on interest payments to Wall Street.”
Moody’s Investors Service issued the highest possible rating of Aaa on Tuesday in their most recent rating of Washington. Similarly, Fitch maintained their impressive AA+ rating of the state, according to their full report issued Monday, and S&P also maintained their AA+ rating.
“I am proud of the work we have done to build and maintain these elite credit ratings,” said State Senator Andy Billig. “That work, combined with the ingenuity and hard work of Washington workers and businesses, has positioned Washington’s economy as a national leader.”
Washington’s credit strengths, according to Moody’s, include the state’s strong financial reserves and liquidity, positive pension funding levels and manageable retiree health insurance liability, and strong fiscal governance practices overall. The credit opinion Moody’s published affirming Washington’s rating stated, “Economic and demographic fundamentals are exceptionally strong, and the state should continue to outperform the nation.”
Fitch reported that the ratings reflect the state’s very strong financial resilience supported by a statutory requirement for a balanced multiyear budget and formulaic funding of the budget stabilization account (BSA) leading to solid reserves.
S&P Global Ratings affirmed its long-term and underlying ratings, characterizing Washington’s credit profile by its strong fiscal management practices, including strong forecasting, a history of timely budget adjustments adapting to changes in forecasts.
S&P, Moody’s and Fitch are the three largest rating agencies today. These agencies rate the creditworthiness of both private enterprises and governments throughout the world.
Prior to this week’s bond sale, the Office of the State Treasurer most recently utilized the state’s impressive credit ratings to obtain low-interest rates and issue bonds to refinance existing obligations in April. In total, refinancings of existing state debt have produced more than $385 million in future debt service savings since Pellicciotti first took office in 2021.