Oregon issued $158 million in bonds to finance various capital projects.
The bonds mature between 2024 and 2043, yielding between 3.53% and 4.52%. They pay interest at 5%. The securities received a rating of AA+ from Fitch Ratings, Aa1 from Moody’s Investors Service, and AA+ from S&P Global Ratings.
The rating reflects “the state’s strong control over revenues and spending, low liabilities, and record of prompt actions to maintain financial flexibility during challenging revenue periods,” Fitch analysts wrote.
Oregon businesses have exceeded economists’ expectations of their postpandemic economic recovery, bringing the state windfall revenue to spend on public services. In August, state economists forecasted an increase in corporate tax collections that will increase the state’s general fund by $437 million over the next two years.
“We must leverage the opportunity presented by another positive forecast to invest in housing production and other urgent needs to support Oregon families and the state’s long-term economic growth,” Governor Tina Kotek said in a statement in August.
Oregon’s revenue is largely driven by personal income taxes; the state does not have a sales tax. The bonds are general obligations of the state, backed by its full faith and credit.
Siebert Williams Shank & Co LLC served as lead underwriter on the issuance, purchasing the bonds for more than $166 million. The price reflected a premium of almost $9 million.