Massachusetts plans to kick off a busy week Thursday with its $1.5 billion competitive sale of fixed-rate, tax-exempt general obligation revenue anticipation notes in three equal tranches.
The commonwealth has also scheduled $500 million and $265 million sales of new money and refunding GO bonds for Aug. 28 and 29, respectively, assistant treasurer for debt management Sue Perez said on a conference call. Morgan Stanley is lead manager for the negotiated sales.
In addition, Massachusetts intends to offer $160 million of Massachusetts Clean Water Trust revenue and green bonds beginning Friday and continuing early next week.
Moody’s Investors Service assigns an MIG1 rating to the RANs. Fitch Ratings and S&P Global Ratings assign F1-plus and SP-1-plus ratings, respectively.
According to Moody’s, MIG1 reflects the commonwealth’s credit quality. It assigns its Aa1 rating and stable outlook to Massachusetts GOs.
“The rating also reflects expected healthy cash margins at each of the staggered note maturity dates and substantial alternative liquidity that could be provided by the commonwealth's budget stabilization fund, subject to legislation appropriation, if necessary,” said Moody’s.
Massachusetts generally sells RANs annually. It does not use interfund borrowing for cash-flow purposes, nor does it tap its rainy-day fund for general fund use unless the legislature approves it.
According to S&P, the $1.5 billion in Series 2018 A, B and C RANs equals amounts issued in the last two fiscal years. “Although not currently expected, the commonwealth also periodically issues commercial paper notes to support intra-year cash flow needs,” S&P said.
Michael Heffernan, secretary of the Executive Office for Administration and Finance, anticipates a “sizeable” deposit into the stabilization, or rainy-day fund for fiscal 2019, resulting in a $368 million net increase for FY19 and a total balance of $2.16 billion.
Gov. Charlie Baker signed the $41.2 billion budget on July 26, after accounting for $37.6 million in net line-item vetoes and excluding transfers to the Medical Assistance Trust Fund, the pension liabilities trust fund and other interagency transfers.
The commonwealth last week said it would earmark roughly $35 million in infrastructure improvements and tax credits to Worcester, New England’s second-largest city, to construct a 10,000-seat minor league baseball stadium in the Canal District south of downtown. The International League’s Class Triple-A Pawtucket Red Sox intend to relocate there for the 2021 season.
Worcester’s City Council members on Tuesday night promised a thorough and transparent review process.
The council’s Economic Development Committee has scheduled public hearings for Aug. 28 and Sept. 5, then make recommendations to the full council.
The International League must also sign off on the agreement.
