Massachusetts sold more than $1.24 billion in bonds to reimburse the state for capital expenditures.
The bonds were sold in two series. The 2023 Series A bonds consist of $970 million and mature between 2025 and 2043, yielding between 2.64% and 3.56%. The 2023 Series A bonds also include two term bonds, maturing in 2048 and 2053. The 2023 Series B bonds consist of almost $271 million and mature between 2033 and 2044, yielding between 2.76% and 2.61%. All of the bonds pay interest at 5%. The securities received a rating of Aa1 from Moody’s Investors Service, AA+ from Fitch Ratings, and AA+ from S&P Global Ratings.
The rating “reflects the commonwealth’s robust economic base, bolstered by social factors such as a highly educated workforce and high income levels, that support an elevated long-term liability burden,” according to Moody’s.
The issuance comes as Massachusetts enacts its capital investment plan, which makes a variety of improvements statewide. This year, the plan includes investments in transportation, economic development, climate resiliency, housing, education, technology, and healthcare projects. The state anticipates spending more than $4.8 billion on the project this fiscal year. About half of that investment will be financed by bonds.
The bonds issued this week are general obligations of the state of Massachusetts, backed by its full faith and credit.
J.P. Morgan Securities, LLC served as lead underwriter on the issuance, purchasing the bonds for about $1.21 billion. The price included a discount of more than $3 million.