Massachusetts issued $658.6 million in bonds to refund previously issued securities.
The bonds mature between 2024 and 2044, yielding between 2.46% and 3.54%. They 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’ “considerable economic resources, adroit management of economic and revenue cyclicality and strong budget controls,” Fitch analysts wrote.
The issuance proceeds will refund bonds the state sold in 2015, 2016, and 2019.
The bond sale reinforces Massachusetts’ position as one of the largest issuers of municipal securities so far this year. The state sold $1.9 billion in bonds in January, including $837 million in additional refunding bonds.
Massachusetts will have to fund these bonds with weaker tax revenue than in previous years. The state’s annual tax collection revenue fell 4.7% in fiscal year 2023, according to the official statement accompanying the sale of the bonds. Year-to-date tax collection revenue in the first six months of FY 2024 is just 0.1% higher than FY 2023, according to the bond documents.
Massachusetts is a wealthy state with a diverse economy. The state ranks second in the country in per capita income, and its economy is supported by the education, healthcare, and technology sectors. The bonds are general obligations of the state, backed by its full faith and credit.
Jefferies LLC served as lead underwriter on the issuance. Omnicap Group LLC acted as municipal advisor.