Worcester, Massachusetts, issued $75 million in bond anticipation notes to provide temporary financing for several city projects.
The notes mature on February 27, 2024, and yield 3.381%. They were issued in anticipation of a long term debt issuance and pay interest at 4.5%. The securities received a rating of MIG-1 from Moody’s Investors Service.
“The MIG 1 rating reflects the strong underlying credit quality of the city reflected in its Aa3 issuer rating,” according to Moody’s. “The rating also incorporates its history of strong market access and satisfactory liquidity at the time of issuance.”
The majority of the note proceeds, about $50 million, will finance the construction of a new building for Worcester’s largest public high school. When the $316 million renovation to Doherty High School is finished, it will be the most sustainable municipal building in the city, according to the Green Worcester Plan, which calls for net-zero emissions across the city by 2050. The city expects the school to open next year.
The remainder of the notes will finance energy service company building rehabilitation, water and sewer improvements, parks development, school renovations, and other projects.
Worcester is the second-biggest city in New England, located about 45 miles west of Boston. The bonds are general obligations of the city, backed by its full faith and credit.
BofA Securities, Inc served as lead underwriter on the issuance.