Washington saved $74 million this week by refunding more than $700 million of general obligation bonds in two competitive sales, officials said.
“Reducing debt service by more than $4 million for the 2011-2013 biennium is a significant savings for Washington,” Treasurer James McIntire said in a statement Tuesday. “By carefully monitoring our debt portfolio we were able to take advance of the current low-interest environment and reap the rewards of the call provisions on outstanding bonds.”
The treasurer’s office said Citi beat out seven other firms for the $338.7 million series of various-purpose general obligation refunding bonds at a true interest cost of 2.59%.
Bank of America Merrill Lynch bid the lowest out of a group of eight to grab the sale of the state’s $364.5 million of motor vehicle fuel-tax refunding bonds with a true interest cost of 2.52%.
Since 2009, the municipal market has seen more than $370 billion of refundings nationwide out of $3.7 trillion of total debt outstanding as of the end of March, according to Thomson Reuters.
Washington officials say the state attained $396 million in present-value savings by refunding $3.5 billion in 11 deals since June 2009 before this week’s offering.
The state is rated double-A-plus across the board. However, Moody’s Investors Service and Fitch Ratings revised their outlook on the state in January to negative due to weaker revenues. Standard & Poor’s has maintained its stable outlook.
McIntire has said the downward revisions came after several quarters of lower revenue forecasts and the state’s revenues have since stabilized.
