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Massachusetts Drops Lehman From VRDB Deal

In response to Lehman Brothers Holdings Inc. bankruptcy filing Monday, Massachusetts replaced the underwriter with two other investment banks on an $850 million transaction to refinance variable-rate bonds into fixed-rate debt.

Goldman, Sachs & Co. earlier in the day repriced $350 million of the VRDBs into fixed-rate debt while Morgan Stanley will remarket the remaining $500 million of debt on Wednesday, according to Department of Treasury spokeswoman, Francy Ronayne.

“We had the foresight to do this as a safety measure and the worst-case scenario did happen and we were able to protect that,” Ronayne said.

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