Shapiro Administration Completes Successful Bond Issuance and Refinancing | Commonwealth of Pennsylvania

Harrisburg, PA - Today, Shapiro Administration Secretary of the Budget Zachary Reber announced the successful sale of approximately $1.57 billion in new General Obligation Bonds, along with a refunding issuance of $179.9 million to refinance approximately $192 million of outstanding bonds. This latest sale and refunding issuance come after Moody's and Fitch re-affirmed the Commonwealth's credit rating at its highest rating in over a decade last week.

Bond refinancing of prior year debt will save Commonwealth taxpayers millions in debt service over the remaining life of the bonds. This year's issuance alone will generate $14.4 million in gross debt service savings and $11.9 million in net present value (NPV) savings - and when combined with the refunding of bonds executed during the current term of the Shapiro Administration, Commonwealth taxpayers will benefit from $207.4 million in savings over the next 10 years.

Debt service cost-savings are estimated to be between $18-36 million resulting from the improved credit ratings secured by the Shapiro Administration in 2023 and 2024 and their affirmation for this issuance continue to accrue benefit to Commonwealth taxpayers - allowing the Shapiro Administration to invest that money in key priorities.

"For two years in a row, our responsible fiscal management has saved the Commonwealth and Pennsylvania taxpayers millions of dollars," said Secretary Reber. "The Moody's upgrade has many benefits - lower borrowing costs and allowing us to direct more funding toward essential programs that Pennsylvanians rely on to educate our kids, keep our communities safe, and grow our economy. The Shapiro Administration will continue to be prudent stewards of the Commonwealth's resources."

The Commonwealth utilized a multi-tranche sale approach to the debt issuances, selling the bonds across three separate bid groups to broaden participation and strengthen competition, allowing for improved participation and competition amongst bidders and investors. Across the three tranches, the Commonwealth received a total of 15 bids, comprising 7 different bidding entities. The NPV savings from the bond refinancing equal to 6.214 percent of refunded par, more than double the Commonwealth's target of 3.0 percent as established in its Debt Management Policy.

This bond sale follows a 2024 ratings upgrade to Aa2 from Aa3 and subsequent affirmation by Moody's citing the Commonwealth's "large and diverse economy," "strong reserves," and "steady economic growth." That upgrade marked the second in less than two years, following a similar upgrade to AA from AA- in 2023 and affirmation by Fitch Ratings, and a stable outlook on the Commonwealth's A+ long-term rating from S&P Global Ratings.

Additionally, improved credit ratings on Pennsylvania's long-term debt is expected to have a positive impact across the Commonwealth - including on the School District Intercept Program, benefiting over 150 Pennsylvania school districts by lowering their borrowing costs, resulting in more funds and resources available for students in their classrooms.

By locking in these savings and reducing financial risk, the Shapiro Administration continues to deliver long-term value for Pennsylvania taxpayers while making smart investments in the Commonwealth's future.

For more information on the 2025-26 budget, visit here.