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Low Rates and Conservative Structure Results in Success for Washington's Inaugural GARVEE Sale

Contact: Chris McGann 360-902-9033

May 22, 2012 – Investors responded to Washington’s first Federal Highway Grant Anticipation Revenue Bonds (GARVEE) with low rates Tuesday in the successful pricing of $494 million.

Approximately twenty-five investors participated in the sale which garnered a low 2.23 percent TIC for the state.

Proceeds from the bonds will be used to pay for a portion of the construction costs for the SR 520 Floating Bridge and Eastside Project.

"We are pleased to see the response to this sale," said Washington State Treasurer Jim McIntire. "Investors responded favorably to the conservative structure of these bonds, which allows us to continue to provide low-cost financing the 520 bridge project."

The GARVEE sale provides transportation financing with bonds that are limited obligations of the state payable from and secured solely by pledged federal aid. The Series 2012 F bonds were rated AA by Standard & Poor’s and Aa2 by Moody’s.

In recent years investors have shown some concern about GARVEE bonds because of increasing uncertainty in federal transportation funding policy.

However, Washington distinguished itself with a prudent structure for the bonds, including limits on future debt issuance. Strong debt-service coverage coupled with relatively short maturities helped address investor concerns about the uncertainty associated with federal transportation revenues.

"The fact that we received low rates and positive reception indicates that our mindful approach to structure was appreciated by investors," McIntire said.

For more information visit the Office of the State Treasurer’s website at