Massachusetts plans to come to market on Thursday with $1.4 billion of general obligation bonds that will kick off the first full trading week of the year.
The deal is one of the largest offerings of the week, which will see $9.1 billion of supply flood into the market after the weeks-long holiday drought.
BofA Securities and Siebert Williams Shank as senior managers are set to price the deal for institutions on Thursday after holding a one-day retail order period on Wednesday.
The tax-exempt deal consists of $850 million of Series A consolidated loan of 2024 GOs and $540 million of Series A GO refunding bonds.
Proceeds from the new money bonds will be used to finance certain authorized
The state said it intends to issue another series of refunding bonds in February in connection with a potential tender offer for some of its outstanding taxable GOs and a current refunding of some other outstanding tax-exempt GOs.
The Series A GOs are tentatively structured as serials, due Jan. 1, running from 2026 to 2042 with term bonds in 2049 and 2054. The refunding GOs are tentatively structured as serials, due March 1, maturing 2027 to 2044.
Co-managers include Jefferies, Wells Fargo Securities, Academy Securities, Barclays, Fidelity and Raymond James. PFM is the financial advisor and Locke Lord is the bond counsel.
The issue is rated Aa1 by Moody's Investors Service and AA-plus by S&P Global Ratings and Fitch Ratings. All three rating agencies assign stable outlooks to the credit.
Last Thursday, the Massachusetts Department of Revenue said preliminary revenue collections for December totaled $3.776 billion, $82 million or 2.1% less than actual collections from the same time last year.
Year-to-date, fiscal 2024 collections were about $17.869 billion, up $60 million, or 0.3%, from the same period in fiscal 2023.
"December collections decreased in non-withheld income tax, sales and use tax, corporate and business tax, and 'all other' tax in comparison to December 2022," said DOR Commissioner Geoffrey Snyder.
"These decreases were partially offset by an increase in income tax withholding. The decrease in non-withheld income tax was driven primarily by lower income tax estimated and return payments and an unfavorable increase in income tax refunds," he said.
"The decrease in sales and use tax was mainly due to typical timing factors in collections. The decrease in 'all other' tax is mostly attributable to a decrease in estate tax, a category that tends to fluctuate," he added.
DOR said December in Massachusetts is a significant month for revenues because many corporate and business taxpayers are required to make quarterly estimated payments at that time and some quarterly personal income tax estimated payments due by Jan. 15 are received in December.
Historically, about 9.5% of the state's annual revenue, on average, has been received during December, DOR said.
