State Treasurer Ted Wheeler announced that Treasury generated savings in excess of $30 million after locking in prices for two revenue bond refunding transactions where the interest rate savings appeared to be strong. “Refunding” sales allow the state to take advantage of low interest rates in the municipal bond market.
“One of my goals is to save Oregonians money, and Treasury has developed a good track record in this area,” said Wheeler. “The Debt Management Division deserves recognition for their work.”
Treasury has now saved more than $80 million since the beginning of 2013, simply by refunding bonds to lower rates.
The two most recent deals included:
- Savings of $15.5 million to ODOT through $194.5 million in ODOT Highway User Tax Revenue Refunding Bonds, sold on June 25, 2014. ODOT’s credit ratings were reconfirmed as part of this transaction by S&P/Moody’s/Fitch at AAA/AA+/AA+ on their senior lien bonds.
- Savings of $15.1 million through $213.7 million in Department of Administrative Services Lottery Revenue Refunding Bonds, priced on July 16, 2014.
In addition, Treasury also sold $650 million in one-year Tax Anticipation Notes in June at 0.12 percent, helping the state’s general fund avoid net costs of $8.1 million in the coming fiscal year through this one sale.
State debt is a tool that can create assets of lasting value, which can help improve Oregon’s economic competitiveness and quality of life. Those include buildings or technology improvements to improve transportation, public safety and education advancement, and seismic upgrades to existing structures. However, bonds must be used judiciously: The state has limited debt capacity.
