PHOENIX - Washington is set to sell almost $500 million of refunding bonds in a competitive deal Thursday.

The state will sell $499 million various purpose GO refunding bonds rated Aa1 by Moody’s Investors Service and AA-plus by both Fitch Ratings and S&P Global Ratings. The firm of K&L Gates in Seattle is bond counsel on the transaction, with Foster Pepper as disclosure counsel. Piper Jaffray and Montague DeRose and Associates are municipal advisors to the state. Following the issuance of the bonds, the state will have about $18.9 billion of GO bonds outstanding.

Washington Treasurer Duane Davidson said new capital projects will not go forward until a new capital budget is passed.
The office of Washington State Treasurer Duane Davidson will sell $499 million of advance refunding bonds this week.

The bonds identified in the offering documents as candidates to be refunded include five different series of GO bonds issued from 2011 to 2013.

Such advance refundings would no longer be possible next year under GOP-backed tax legislation advancing in Congress.

In rating the bonds, Moody’s noted Washington’s “sound management practices such as its quarterly consensus revenue forecasting process, multi-year revenue and expenditure projections, timely budget adoption, and demonstrated willingness to address budget shortfalls.”

Washington is continuing to tackle the challenge of a state Supreme Court order requiring billions of additional spending on K-12 schools, which the state did ramp up by $1.8 billion in its 2017-2019 budget. Over the 2017-19 and 2019- 21 biennia, the projected total increase in K-12 spending is $7.3 billion, according to a November investor presentation posted to the state’s investor website.

According to offering documents, Washington currently anticipates that it will issue approximately $300 million of GO bonds and approximately $70 million motor vehicle fuel tax general obligation bonds in the beginning of 2018.

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Kyle Glazier

Kyle Glazier

Kyle Glazier is a reporter covering market trends, infrastructure, and the Far West region for The Bond Buyer.