Massachusetts issued $1.88 billion in bonds to finance a variety of capital expenditures and refund previously issued securities.
The state sold the bonds in two series. The so-called consolidated loan bonds mature between 2026 and 2054, yielding between 2.41% and 3.85%. The 2024 Series A bonds mature between 2027 and 2044, yielding between 2.338% and 3.48%. All of the bonds 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 Massachusetts’s “considerable economic resources, adroit management of economic and revenue cyclicality and strong budget controls,” Fitch analysts wrote.
The issuance marked Massachusetts’s first bond sale this year and one of the largest offerings to hit the municipal bond market so far in 2024.
The consolidated loan bonds will fund improvements included in the state’s capital investment plan, which calls for $14 billion spending over the next five years. The other bonds will refund six sets of bonds the state issued between 2014 and 2018.
Massachusetts intends to issue another set of refunding bonds next month.
The bonds are general obligations of the state, backed by its full faith and credit.
BofA Securities, Inc served as lead underwriter on the issuance. PFM Financial Advisors LLC acted as municipal advisor.