Oregon taxpayers will save $60.8 million thanks to Treasury refinancing of state bonds
By Oregon State Treasurer,
Oregon taxpayers will save millions thanks to a successful initiative to refinance state bonds to lower rates, State Treasurer Ted Wheeler announced today.
The series of refinancing efforts in the first half of 2012 will reduce payments on various state office building, educational, and highway bonds by an estimated $60.8 million over the life of the debt, compared to what was due previously. These “refunding” sales allow the state to take advantage of low interest rates in the municipal bond market.
Taxpayers also benefitted from Oregon’s strong credit rating, and because voters endorsed lower-cost financing options through Measure 72 in 2010.
“The State Treasury is making the most of this historic opportunity, and we are saving Oregonians millions by qualifying for bargain-basement interest rates,” said Treasurer Wheeler. “When we pay less in interest, it means Oregon can devote more resources to other public priorities like education, public safety and protecting our most vulnerable citizens.”
The final sale in the refinancing series, which concluded last week, reduces the cost of outstanding Oregon Department of Transportation bonds. The $200.8 million refunding has a present value savings of $20.9 million – a savings of 10 percent from the previous bonds.
The projects that were included in the original transportation bond funded highway and bridge improvements throughout the state as part of the Oregon Transportation Investment Act.
Treasurer Wheeler recognized the Treasury Debt Management Division for overseeing the successful refinancing initiative. The division monitors public bonding in Oregon, sells Oregon bonds, and makes formal presentations to credit rating firms.
Public bonding is a powerful tool that can improve the state for generations by financing the construction of roads, bridges, university buildings and other vital public facilities. However, it is a tool that must be used judiciously: The state has limited debt capacity.
The 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. You can track Treasury-related news on Twitter at @OregonTreasury.