Bond refinancing for transit improvements will help save more than $15 million
High credit ratings continue to help King County lower the cost of borrowing money to fund critical transportation improvements. On Monday, the County sold $71.7 million in bonds to refinance outstanding debt associated with the 2002 and 2004 bonds originally used for the construction of the Downtown Seattle Transit Tunnel and improvements at King County Metro transit bases.
"Once again, the taxpayers win because we are able to finance key transportation assets at the lowest possible cost," said King County Executive Dow Constantine.
King County's excellent credit ratings led to very favorable bids for the bonds. Eleven firms submitted bids, with Citigroup Global Markets offering the best interest rate. The effective rate for these new bonds is just 2.62 percent, resulting in a savings of more than $15 million in debt service through 2034.
"Saving $15 million for Metro Transit and Sound Transit is significant at a time when we face a long-term transit funding gap," said King County Councilmember Larry Phillips, who chairs the Transportation, Economy, and Environment Committee. "Every dollar we save through lower borrowing costs is a dollar we can put into transit service for the people of King County."
King County is able to borrow money at very low interest rates due to its outstanding credit ratings. Less than ten percent of counties nationwide have a "AAA" rating like King County. The major ratings agencies have all cited the County's prudent financial management in assigning credit ratings that exceed those of both the federal and Washington State governments. What's more, King County has the highest credit rating of any county in the state of Washington. Since the beginning of 2011, various bond refinancings have saved King County taxpayers nearly $110 million, enabling the County to stretch limited public dollars and reinvest those savings into providing better service to residents.