Washington Adds to Refunding, Pushing Size to $839M

bb072810wa.jpg

ALAMEDA, Calif. — Washington has upsized the refunding component of Wednesday’s general obligation bond sale, bringing the amount of debt being priced to $839 million.

The bonds will sell in three separate competitive auctions — $373.6 million of various-purpose tax-exempt GOs, $347.3 million of tax-exempt refunding GOs, and $118.2 million of various-purpose taxable GOs.

“The market’s looking pretty sweet for us right now,” Treasurer James McIntire said Monday. “We’ve just bumped up the refunding. The savings we’re going to get off of that is pretty substantial.”

McIntire, who was elected in 2008, said his team has retooled the state’s approach to issuing debt, to the benefit of taxpayers. The biggest change has been the use of negotiated sales, a tool Washington used on two Build America Bond deals for its fuel tax-supported bonds. That also helps competitive deals like Wednesday’s, he said.

“Working the two back and forth, it not only opens up more markets for us, it gives us a chance to say to our underwriters, 'We’re looking forward to how you bid on our competitive sales,’ ” McIntire said.

At the treasurer’s request, lawmakers this year approved a bill modernizing the bond-issuance process. It will allow the State Finance Committee — consisting of the treasurer, governor, and lieutenant governor — to delegate authority to the treasurer to schedule sales.

That’s expected to happen Wednesday, when the Finance Committee meets to ratify the day’s bond sale.

Bond sale schedules will not be constrained afterward by the need to coordinate the three officials’ calendars to hold a sale date meeting.

“That will give us more flexibility, particularly with regards to refundings, but also for all our issues,” McIntire said.

Also at his urging, lawmakers approved a constitutional amendment to revise the way the state’s debt limit is calculated, to give the government the option of selling its various-purpose GOs as BABs. Voters will decide the amendment’s fate in November.

Washington GOs have double-A-plus ratings across the board.

Montague DeRose and Associates LLC and Seattle-Northwest Securities Corp. are financial advisers for today’s deal. Foster Pepper PLLC is bond ­counsel.

For reprint and licensing requests for this article, click here.
Washington
MORE FROM BOND BUYER