For immediate release:  February 26, 2004
For more information:  Barton Potter (360) 902-9033

State earns savings from bond refinancing

OLYMPIA Wash. — A bond refunding (refinancing) sale today allowed the Office of the State Treasurer to take advantage of current low interest rates to gross more than $27 million in savings over the original cost of financing the bonds.

The refunding of issues from 1995 and 1996 yielded an overall savings of 8.2 percent, or $22.5 million in net present value. The sale drew five bidders for each of two issues.

“When we have the chance to save this kind of money for the taxpayers of the state, we will do everything we can to make it happen,” State Treasurer Michael J. Murphy said. “Once again, the healthy number of bidders tells me Washington’s bonds remain attractive in the marketplace.”

The State Finance Committee this morning awarded bids to Merrill Lynch & Co. for each of separate refunding sales of $120.2 million and $158.2 million, respectively.

Refunding for the $120.2 million in various purpose general obligation bonds (R-2004C) saves the state nearly $10.4 million in net present value, which equates to a savings of 8.7 percent compared to the initial 1996 cost.

>For the $158.2 million in motor vehicle fuel tax general obligation bonds (R-2004D), combining three issues from 1995 and1996, the refunding yielded nearly $12.1 million in net present value savings, or more than 7.7 percent.

Merrill Lynch offered a true interest cost (TIC) bid of 3.7748027 percent for the R-2004C issue. Also bidding were Citigroup Global Markets (3.7886001 TIC), Lehman Brothers (3.7990592), UBS Financial Services (3.8119591) and Bear, Stearns & Co. (3.850341).

Merrill Lynch was also the successful bidder for the R-2004D issue with a TIC bid of 3.7820366 percent. Also competing were Citigroup Global Markets (3.8080234), Lehman Brothers (3.8154734), UBS Financial Services (3.8261874) and Bear, Stearns & Co.(3.8652586).

Treasurer Murphy is chairman of the State Finance Committee and serves on the committee along with Gov. Gary Locke and Lt. Gov. Brad Owen.

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