Massachusetts intends to sell $550 million of general obligation bonds through an April 28 competitive offering, the commonwealth's first under state Treasurer Deborah Goldberg.
Moody's Investors Service, Standard & Poor's and Fitch Ratings affirmed their GO ratings. Moody's rates Massachusetts GOs Aa1, while S&P and Fitch rate them an equivalent AA-plus.
"Maintaining the commonwealth's already exceptional bond rating is critical to protecting taxpayer dollars and enhancing the fiscal stability of our state," Goldberg, a Democrat who took office in January, said late Thursday.
The ratings, the state's highesr ever, place the commonwealth one notch below the top rating of AAA.
"Maintaining the highest bond rating in the commonwealth's history will provide the access to capital markets we need to begin executing our capital budget plan," said Gov. Charlie Baker, a Republican also four months into office.
Baker told investors last December that Massachusetts should strive for a AAA rating.
Last week, Goldberg's office and senior state officials across a range of departments hosted the rating agencies in order to introduce the new Baker and Goldberg administrations and present budget and debt plans for the upcoming fiscal year. As a part of those meetings, members of Treasury, the governor's staff, the Department of Revenue, the state comptroller's office and the State Board of Retirement presented before the ratings analysts.
Goldberg's predecessor, Steven Grossman, hosted similar meetings in 2011 before S&P upgraded the commonwealth in September of that year. Massachusetts has earned several upgrades since 1991, when it was a BBB credit.
The April 28 sale will consist of $350 million in Series A tax-exempt and $200 million in Series B taxable bonds. Proceeds will benefit various capital purposes.
Rating agencies labeled Massachusetts' debt as high but manageable. The commonwealth has roughly $20 billion of GO debt outstanding.
Fitch called the commonwealth's net tax-supported debt — equal to 9% of personal income as of last June 30 — as "comparatively high." Fitch added that the commonwealth's above-average role in relation to local levels of government, and obligations of the Massachusetts Bay Transportation Authority and Massachusetts School Building Authority, account for the high debt.
The future of MBTA operations and the state's role in its funding are up in the air, after a Baker-appointed task force earlier this month lambasted the transit agency for its dysfunction and urged its overhaul. Baker appointed the group after a series of winter storms crippled commuter service.
"Other long-term liabilities are also large, in our opinion," said S&P, which cited unfunded pension liabilities of $28.8 billion as of June 30, 2014. S&P added, however, that Massachusetts continues to fully fund its actuarially required contribution.
Moody's said its stable outlook reflected the state's high reserve levels. Massachusetts reported $1.129 billion in its stabilization, or rainy-day fund as of Feb. 28.
