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Originally published November 20, 2013 at 5:38 PM | Page modified November 21, 2013 at 7:01 AM

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Loss of Boeing 777X could hit state’s credit rating


Seattle Times aerospace reporter

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Losing Boeing’s 777X jet could make fixing Washington state’s roads and bridges “a couple of hundred million dollars” more expensive, state treasurer Jim McIntire warned Wednesday.

That’s because if Boeing chooses to build the jet somewhere else, the state’s credit rating will likely be downgraded, increasing the cost of borrowing to fund big infrastructure projects.

At a quarterly meeting of the state’s Economic and Revenue Forecast Council in Olympia, McIntire said credit rating agency Moody’s on Wednesday released a report stating that “it’s a credit negative for Washington if in fact that (777X) decision doesn’t go our way.”

“Nobody is shocked by that,” he added.

Asked what a credit downgrade could mean in practice, McIntire said, “It will raise the cost of capital. It could be several hundred million dollars.”

In today’s money market, where interest rates are compressed and very low, the short-term impact of a shift in the interest rate “wouldn’t be very big,” he said.

But if rates rise as expected and then some years out Washington must borrow to finance projects such as the $10 billion transportation proposal now before the legislature, then the higher cost of borrowing will add up.

“As you look out over, let’s say the next 10 years, if you’ve got a transportation package you’re considering, you have to think of it in terms of a couple of hundred million dollars of impact,” McIntire said.

The Moody’s report cited by McIntire was not publicly available Wednesday afternoon.

Dominic Gates: (206) 464-2963 or dgates@seattletimes.com



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