Massachusetts plans to sell $490.7 million of municipal bonds to help fund improvements for its commuter rail and other transportation projects throughout the state.
The bonds are scheduled to price Wednesday after a retail order period Tuesday, according to an online investor presentation.
According to preliminary bond documents, the deal consists of three series: a $150 million revenue bond series to fund the rail enhancement program, a $125 million sustainability bond series and $215.7 million of revenue refunding bonds.
The sustainability bonds will finance construction for the Massachusetts Bay Transportation Authority's
"The MBTA remains steadfast in advancing the South Coast Rail Project as quickly as possible and with the highest standards of quality and safety," Phillip Eng, MBTA's General Manager and CEO, said in a statement. "Our ongoing testing and quality control measures are aimed at ensuring a reliable and dependable rail service that the community can trust."
The South Coast Rail is part of a greater effort to make the cash-strapped system more efficient for commuters that have been struggling with unreliable train service for decades. That spotty service is due in part by continuous funding woes that are set to deepen as time goes on, driven by a sluggish post-pandemic ridership and debt inherited from past investments like the Big Dig — the most expensive highway project in the US.
The South Coast Rail project costs are currently budgeted at $990 million and are expected to be funded with a combination of proceeds of both Commonwealth general obligation bonds and other muni debt, according to the state treasurer's office.
Growing concerns over the subway that serves the Greater Boston region, known as the T, have prompted legislators
But there are still decisions to be made on how to mitigate the system's financial issues. The MBTA is facing budget deficits that advocates have called "existential" — and by fiscal 2029, that shortfall is poised to swell to almost $900 million.
S&P Global Ratings assigned a rating of AAA to the bonds, reflecting its view of "the commonwealth's very strong economy, debt service coverage, and bond covenants," credit analyst Ladunni Okolo said in a statement.
The deal is rated AAA by Kroll Bond Rating Agency and Aa1 by Moody's Ratings, according to the investor presentation.
BofA Securities is lead manager. Omnicap is municipal advisor. Locke Lord is bond counsel.
