Taking advantage of lower interest rates by refinancing bonds sold for economic development and transportation infrastructure projects.
Oregon State Treasury’s Debt Management Division began 2015 the way it ended 2014, by saving Oregonians money. Treasurer Ted Wheeler announced today that Treasury has refinanced debt for the Oregon State Lottery and the Oregon Department of Transportation, achieving more than $27 million and $44 million respectively in cash flow savings after locking in prices for two revenue bond refunding transactions.
“Oregonians just got a late Christmas present, but it was well worth the wait,” said Wheeler. “Our Debt Management Division staff spent their days looking for creative ways to save money, and they deserve recognition for their work.”
Treasury is preparing to refinance several other state program bonds, such as general obligation bonds used for higher education projects, which will add to the $71 million already saved since January 2015. Treasury has achieved more than $172 million in cash flow savings since the beginning of 2013, by refunding bonds to lower rates, and expects to be able to save significant additional amounts this year.
“I’d also like to acknowledge the Legislature’s prudent use of bonding authority,” said Wheeler. “Bonds do have a cost, even if below normal market rates, and therefore must be used judiciously to maintain Oregon’s high credit rating.”
The two most recent deals included:
• Cash flow savings of $27.6 million through the refunding of $358.4 million in Department of Administrative Services Lottery Revenue Bonds. The refunding bonds were priced January 7, 2015. Credit ratings were AAA and Aa2 by S&P and Moody’s respectively.
• Cash flow savings of $44.1 million through the refunding of $408 million in Oregon Department of Transportation Highway User Tax Revenue Bonds. The refunding bonds were sold January 14, 2015; ODOT’s credit ratings were reconfirmed as part of this transaction by S&P/Moody’s/Fitch at AAA/Aa1/AA+ respectively.
The Oregon State Treasury protects public assets and saves Oregonians money through its investment, banking, and debt management functions. State investment policies are overseen by the Oregon Investment Council. The State Treasury also promotes public outreach and education to help Oregonians learn strategies to save money, invest for college and make smart financial choices.
