Washington saved 14% during a $978 million refunding bond sale on Tuesday — the largest refunding in the state’s history. The state treasurer’s office said it achieved more than $154 million in present-value savings from the debt refunding.

“This bond sale will lower general fund debt-service costs by more than $11 million this biennium to help close the budget gap,” state Treasurer James McIntire said in a statement. “This brings our total general fund savings in this biennium’s debt service costs to $31 million since the budget was adopted last spring.”

Bank of America Merrill Lynch beat out eight other bidders for $715 million of various-purpose general obligation refunding bond with a true interest cost of 2.62%.

Wells Fargo Bank was the highest of eight bidders on the $263 million motor vehicle fuel tax refunding bonds with a TIC of 2.57%.

The refinancing came shortly after Moody’s Investors Service changed its rating outlook on more than $18 billion of Washington debt to negative from stable Monday because of falling revenues. Fitch Ratings revised its outlook to negative last week.

Washington GOs are still rated AA-plus across the board.

Lawmakers are working to tackle a $1 billion budget gap and buffer reserves in the current two-year budget during a two-month session that started earlier this month.

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