Second, $124 million bond sale refinances lottery bonds
SALEM, Ore. (KTVZ) — Affordable housing, drinking water improvements, schools and earthquake readiness are just a few of the projects that will be funded through the Oregon State Treasury’s recent $610.2 million bond sale on behalf of state government. A second, $124.1 million bond sale underway by Treasury’s Debt Management team will refinance some of the state’s Lottery bonds to a lower rate, saving the state millions of dollars.
“When we can help state and local governments secure the lowest costs for project financing, those governments can do more for the people they serve,” said Treasurer Tobias Read. “That goes for new bonds and new projects, which bring much-needed economic activity to the state, as well as older bonds that can be refinanced at lower rates. It all adds up for Oregon communities.”
Treasury’s Debt Management team wrapped up the spring general obligation bond sale at the end of March after securing excellent low-cost financing. The sale includes just under $395.9 million in tax-exempt general obligation bond proceeds for 28 projects from eight different state government entities. Projects include capital improvements at public universities, improvements to Salem’s drinking water system, renovations and accessibility improvements to judicial buildings and the state capitol, and upgrades to the state’s Medicaid eligibility system.
Another $152.5 million of taxable Sustainability Bonds will fund affordable housing projects throughout the state, including new home construction and housing for people experiencing chronic homelessness. This was the fourth issuance of sustainability bonds by Oregon Treasury with proceeds dedicated to affordable housing.
Additionally, $178.5 million will fund seismic and school district grant program bonds for implementing seismic upgrades or other capital costs for public education buildings. These programs are overseen by the Oregon Department of Education and the Oregon Business Development Department.
The refunding of Lottery Bonds began April 12 and will officially close on April 27. The sale has been well received by the bond market, with the Treasury team securing a collective 1.803% interest rate for the combination of tax-exempt and taxable refunding bonds, resulting in $15.9 million in present value savings to the state. For the two-year state budgeting period that will end June 30, 2021, Treasury has saved Oregon more than $224.8 million by refunding previously issued bonds at lower interest rates.
“The Treasury team has been carefully watching and engaging with the bond market over the past few months to bring the lowest-cost financing to Oregon,” said Jacqueline Knights, who came on board as Treasury’s Director of Debt Management in September 2020. “Despite the many pressures on state government’s finances, Oregon has been thoughtful stewards of our state budget, and we continue to be viewed favorably by investors.”
In advance of the spring bond sales, Oregon Treasury received updated General Obligation bond ratings from Standard and Poors, Fitch Ratings, and Moody’s Investors Services. In reports published by the three firms, Oregon maintained its respective AA+/AA+/Aa1 ratings along with a stable outlook – a welcome confirmation of the state’s fiscal management throughout the COVID pandemic. Treasury's next state General Obligation bond sale opens this week and will close in May.
New Projects Funded by Recently-Sold State GO Bonds
|Series||Project Agency/Recipient||Project Name||Amount of Bond Proceeds|
|2021 Series A||Department of Human Services||ONE Integrated Eligibility and Medicaid Eligibility System||$ 9,000,000|
|Department of Corrections||Camera System||5,383,804|
|Department of Corrections||Radio System||11,498,225|
|Department of Corrections||Capital Improvement & Renewal||24,478,039|
|Higher Education Coordinating Commission||Public Universities Capital Improvement & Renewal||65,000,000|
|Higher Education Coordinating Commission||OIT – OMIC Rapid Prototyping Education Lab||3,200,000|
|Higher Education Coordinating Commission||OIT - Boivin Hall Rehabilitation||18,270,000|
|Higher Education Coordinating Commission||PSU - Science Building 1 Renovation and Expansion||52,500,000|
|Higher Education Coordinating Commission||UO - Huestis Hall Renovation||50,880,000|
|Oregon Business Development Department||Salem Drinking Water System Improvements||20,000,000|
|Oregon Military Department||Salem & Pendleton Aviation Facility Emergency Enhancement||9,852,000|
|Oregon Military Department||ASLEP - Portland Jackson Armory||4,275,000|
|Oregon Military Department||Oregon Military Museum||2,000,000|
|Oregon Youth Authority||MacLaren West Cottages Renovation||4,093,653|
|Oregon Youth Authority||Oak Creek Medical & Dental Renovations||435,817|
|Oregon Youth Authority||Rogue Valley Facility Improvements||1,004,222|
|Oregon Youth Authority||Tillamook Medical & Dental Renovations||869,100|
|Oregon Youth Authority||Capital Improvements||454,930|
|Oregon Youth Authority||MacLaren Infirmary and Pharmacy Renovation & Expansion||125,000|
|Legislative Administration||Document Publishing and Management System||4,262,000|
|Legislative Administration||Capitol Accessibility, Maintenance & Safety||57,050,000|
|Oregon Judicial Department||Multnomah County Courthouse||2,619,688|
|Oregon Judicial Department||Supreme Court Building Renovation||27,820,000|
|2021 Series B||Department of Administrative Services||State Fair Horse Barn||3,000,000|
|Department of Administrative Services||State Fair Poultry Barn||2,000,000|
|Department of Administrative Services||State Fair Facilities Capital Improvements||5,325,925|
|Higher Education Coordinating Commission||OIT – OMIC Sinter HIP Equipment||3,000,000|
|Higher Education Coordinating Commission||UO – ShakeAlert Seismic Detection System||7,500,000|
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About Oregon Treasury
The Oregon State Treasury improves the financial well-being of all Oregonians. We provide low-cost banking, debt management, and investment programs for governments and empower Oregonians to invest in themselves and their loved ones through the Oregon College Savings Plan, Oregon ABLE Savings Plan, and OregonSaves.