King County, Washington, sold $91.7 million in bonds to finance improvements to a local hospital.
The bonds mature between 2024 and 2043, yielding between 2.41% and 3.36%. They pay interest at 5%. The securities received a rating of AAA from Fitch Ratings, Aaa from Moody’s Investors Service, and AAA from S&P Global Ratings.
“The county is well positioned to withstand cyclical economic weakness and fiscal challenges given satisfactory revenue raising capacity, solid expenditure flexibility and health available reserves,” Fitch analysts wrote.
The bond proceeds will fund public health, safety, and seismic improvements to HarborView Medical Center, a hospital in Seattle managed by the University of Washington. In 2020, Seattle voters approved a proposal to increase taxes to fund the expansion of Harborview with up to $1.74 billion in bonds.
The most recent bond issuance marks the second under that authorization after a previous $23 million bond sale in 2021. The county plans to sell an additional $218 million in bonds for HarborView this year.
King County includes Seattle and many of its eastern suburbs, including almost 30% of the population of Washington. Property taxes in the county, which support the bonds, have increased rapidly in recent years, though they are expected to decline in 2024, according to Moody’s.
“However, given the county’s historically strong financial management team, we anticipate the county’s long-term financial results will remain stable,” Moody’s analysts wrote.
The bonds are general obligations of the county, backed by its full faith and credit.
RBC Capital Markets, LLC purchased the bonds for $106 million. The price reflected a premium of $14 million. Piper Sandler & Co served as municipal advisor.