Massachusetts amends bond documents to reflect COVID-19 emergency

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Massachusetts, which is planning a $268 million competitive general obligation sale on Thursday, has amended its bond documents to acknowledge Gov. Charlie Baker's emergency declaration in light of the COVID-19 outbreak.

"The continued spread of COVID-19 may adversely impact the commonwealth's, as well as the national economy," Massachusetts Treasury officials said in Wednesday's preliminary official statement supplement. "The commonwealth cannot predict at this time the extent or duration of any such impact. Gov. Baker's administration continues to monitor the situation."

Massachusetts Gov. Charlie Baker cited a spike in COVID-19 cases.

Baker made his announcement Tuesday while citing a spike in confirmed and presumptive cases to 92. The move includes guidance for executive-branch employees such as a ban on all work-related travel. In addition, conferences, seminars and other discretionary gatherings scheduled and hosted by executive-branch agencies involving external parties are to be held virtually or canceled.

In addition, the commonwealth has activated the Massachusetts Emergency Management Agency, which is collaborating with health, human services, public safety and several other government agencies. This working group follows the Department of Public Health’s infectious disease task force formed in January.

The Massachusetts Bay Transportation Authority, which operates Greater Boston mass transit, will continue to disinfect surfaces and vehicles in line with its new cleaning protocol.

Neighboring governors Andrew Cuomo in New York, Gina Raimondo of Rhode Island and Ned Lamont of Connecticut have also declared emergencies.

Massachusetts' sale involves $150 million of Series 2020-D new money bonds and $117.8 million of Series 2020-A refunding bonds. PFM is the financial advisor. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC is bond counsel and disclosure counsel.

Fitch Ratings rates the bonds AA-plus, while Moody's Investors Service and S&P Global Ratings assign Aa1 and AA ratings, respectively. All three assign stable outlooks.

"Fitch believes the commonwealth retains a high capacity to address cyclical downturns and operating under-performance and has repeatedly demonstrated its commitment to maintaining a solid financial position," the rating agency said. Fitch cited Massachusetts' rainy-day fund balance, which reached $3.4 billion as of fiscal 2019.

Boston Mayor Martin Walsh called the situation fluid. Preparations include the possibility of shutting down the city.

"We're looking at what's happening around the world, what's happening in Italy," he said Wednesday on radio station WBUR. "I'm not sure if we'll get to that point, but I think we're still in a position here to see how we can best try and mitigate the spread of the virus."

Walsh said his office is analyzing the financial impact on the city and its businesses, including hotels. "Our economic development office is reaching out to businesses, [though] we can't really assist at this point," he said. "Our businesses, especially our smaller businesses, potentially are going feel a really big impact."

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