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Washington State Bonds Draw Strong Bids

OLYMPIA, WA – Today the Office of the State Treasurer sold $601.9 million in bonds. The bonds were sold in two series; $489,880,000 Various Purpose General Obligation (G.O.) Bonds, Series 2018C, and $112,040,000 Motor Vehicle Fuel Tax General Obligation (MVFT G.O.) Bonds, Series 2018D.

Sale Summary

The sale attracted strong interest, with both series receiving bids from six underwriters. Morgan Stanley & Co, LLC won the bid for both sales, with a True Interest Cost (TIC) of 3.60187% for the $489,880,000 of Various Purpose G.O. Bonds and a TIC of 3.609200% for the $112,040,000 of MVFT G.O. Bonds. Bank of America Merrill Lynch, at 3.629810%, was the second lowest bidder for the Various Purpose G.O. Bonds. Wells Fargo Bank, at 3.620007%, was the second lowest bidder for the Motor Vehicle Fuel Tax G.O. Bonds. Both series of bonds are expected to be delivered on March 21, 2018, have average lives of 15.2 years, and final maturity dates of February 1, 2043. This morning Treasurer Davidson signed the resolution finalizing the sale of the bonds.

Various Purpose General Obligation Bonds

The Various Purpose G.O. Bonds, Series 2018C, will be used to fund capital projects around the state. Examples of projects to be financed with proceeds of the Series 2018C Bonds include K-3 facilities supporting class-size reduction, K-12 school renewal and replacement projects, facilities for State universities and community and technical colleges, community-based and State facilities projects, water supply, flood protection, habitat conservation and rehabilitation projects, outdoor recreation facilities, riparian protection projects, and farmland preservation. The Various Purpose G.O. bonds sold today provide funds for projects approved by the legislature as a part of the 2017-19 capital budget.

Motor Vehicle Fuel Tax General Obligation Bonds

The MVFT G.O., Series 2018D bonds will be used to finance transportation projects. Examples of projects to be financed with proceeds of the Series 2018D Bonds include improvements to the I-5/SR 16 interchange, improvements to I-90 at Snoqualmie Pass East, and improvements to the North Spokane Corridor of U.S. 395. The MVFT G.O. sold today provide funds for projects approved by the legislature in the 2017-19 transportation budget.

Rating

The State’s bond ratings were reaffirmed in February with no change by the three major rating agencies (Aa1/AA+, AA+) with a stable outlook.