OLYMPIA – Three national credit rating agencies affirmed Washington state’s excellent financial standing ahead of today’s sale of over $1.5 billion in new money bonds. Citing Washington’s diverse economy, strong budgeting and governance practices, and commitment to addressing varied challenges, the credit rating agencies maintained the state’s Aaa/AA+/AA+ ratings. With these ratings, Washington now exceeds the credit rating of the federal government for the first time in history.
Notably, S&P affirmed its “Positive Outlook” to Washington’s AA+ rating, indicating a 1-in-3 chance of a ratings upgrade for Washington state in the next two years.
“Washington’s demonstrated excellence in Treasury management, paired with sound budgeting practices from the Governor and the Legislature remain key factors in keeping Washington financially well-positioned,” said Treasurer Mike Pellicciotti. “Maintaining our state’s credit ratings and pursuing an achievable pathway to a credit upgrade requires leaders in our state to prioritize effective fiscal governance. I am thankful for their collaboration and commitment to protecting the health and strength of Washington’s finances, which are critical as we weather the storm of national financial uncertainty in the years ahead.”
Washington features a well-funded pension system, a manageable debt load, significant liquidity, and projections for long-term fiscal stability.
“We fought hard to protect our bond rating in a very challenging budget. That paid off – we heard from ratings agencies that our state’s responsible balanced budgeting practices played a key role in securing Washington’s excellent financial standing,” said Governor Bob Ferguson. “When our state is highly rated it opens capacity in our transportation and capital budgets to build more schools, fund more environmental clean-up projects, and replace aging infrastructure faster.”
In reaffirming their highest possible rating of Aaa, Moody’s noted Washington’s demonstrated willingness and ability to balance budgets, policy flexibility and strong financial management practices as key factors in maintaining its stable outlook. Washington’s sound financial practices have elevated it to be one of 18 states rated Aaa by Moody’s.
“Despite the significant challenges we faced this year, these ratings affirm that we passed a responsible, forward-looking budget,” said Sen. June Robinson (D-Everett), chair of the Senate Ways & Means Committee. “We made difficult choices, but we did so in a balanced way that protects the core services people rely on, maintains our reserves, and keeps Washington in a strong position for the future.”
The state utilizes its credit ratings to secure lower interest rates and reduce borrowing costs when selling bonds. Washington bonds provide funds for capital projects such as constructing schools, major infrastructure and roadway projects, and various other capital expenditures. They are also a mark of a state’s long-term fiscal stability.
Today, Washington conducted a sale of bonds in three series:
Various Purpose General Obligation Bonds, Series 2026A
The $1,027,085,000 VPGO Series 2026A bonds are being issued to provide funds to pay and reimburse state expenditures for various capital projects. Due to its large size, the bonds were divided into two tranches, to be sold as more manageable “Bid Groups”.
The state received seven bids for the $540,930,000 sold as Bid Group 1 (maturities 2031-2043). Underwriter Barclays Capital Inc. submitted the best bid with a True Interest Cost (TIC) of 4.11%.
The state received eight bids for the $486,945,000 sold as Bid Group 2 (maturities 2044-2050). Underwriter J.P. Morgan Securities LLC submitted the best bid with a TIC of 4.85%.
On a combined basis, the $1,027,085,000 VPGO Series 2026A bonds sold at an aggregate TIC of 4.52%. The final maturity date for Series 2026A is August 1, 2050.
General Obligation Bonds, Series 2026T (Taxable)
The $152,330,000 GO bonds (Taxable) are being issued for various capital projects that are not eligible for tax-exempt financing.
The state received eight bids for the GO bonds Series 2026T (Taxable) (maturities 2026-2031). Underwriter Wells Fargo Bank, National Association submitted the winning bid with a TIC of 4.06%.
Motor Vehicle Fuel Tax and Vehicle Related Fees General Obligation Bonds, Series 2026B
The $283,775,000 MVFT/VRF GO Series 2026B bonds are being issued for transportation capital projects.
The state received six bids for the MVFT/VRF GO bonds (maturities 2026-2050) with underwriter BofA Securities, Inc. submitting the winning bid with a TIC of 4.45%.