Politics & Government

State refinances nearly $1 billion in debt, saving $29 million over next 32 months

The Washington state Treasurer’s Office refinanced more than $934 million in state bonds during Wednesday’s turbulent trading on Wall Street, securing low enough rates to save taxpayers about $29 million over the next 32 months.

The moves reduce debt payments from the state’s operating and transportation budgets, according to state Treasurer Jim McIntire. Over 17 years, the refinancing of $934.1 million in bonds will save $172 million, his spokesmen said.

The short-term savings include $21 million through mid-2017 in the state general fund, which is under pressure to provide more for K-12 schools, and $8 million from the transportation budget, spokesman Andrew Smith said.

McIntire said in a statement: “These terrific results in a very volatile market are a reflection of the state’s strong financial management and credit. ... The savings produced by this refinancing will be well received by legislative budget writers next year.”

Nearly $627 million in general obligation bonds were sold to low bidder Bank of America Merrill Lynch at what the treasurer called “a true interest cost” of 2.84 percent, which includes interest, fees and other charges. Another $307 million in bonds paid by motor vehicle fuel taxes drew a 2.95 percent rate from low bidder JP Morgan Securities. Each issue drew five bidders.

The agency said it has refinanced $7 billion in debt since 2009 and will save the state $967.3 million over the life of the debt.

Because problems with the state’s computer network caused outages or degraded telecommunications service for parts of Tuesday, McIntire moved his bond refinancing team to offices in Seattle to execute the deals, Smith said.