Massachusetts has completed a $500 million sale of Commonwealth Transportation Fund revenue bonds to help fund six new rail projects.
More than $150 million in retail orders for the Commonwealth Transportation Fund revenue bonds, 2015 Series A, were received on Nov. 4 with remaining bonds sold to the institutional market the following day, according to Massachusetts State Treasurer Deb Goldberg. Citi led the transaction, which was originally planned to total $450 million with a second sale in December, but was increased due to favorable market conditions. Goldberg said additional proceeds are expected to fund portions of the state's Accelerated Bridge Program.
"One of the best ways we can ensure that Massachusetts remains the best place in America to start a business or raise a family is investment in our rail infrastructure," said Treasurer Deb Goldberg in a statement.
"This deal helps us do that and at a low cost of capital," she said.
"We consistently look to execute our transactions as efficiently and cost-effectively as possible," said Sue Perez, assistant treasurer for debt management. "Because of strong demand and heavy retail participation, we were able to upsize the total transaction which will save hundreds of thousands of dollars that we would have paid in additional transaction costs had we conducted the originally-planned second sale in December."
The sale aims to address improvements to the Massachusetts Bay Transportation Authority that were outlined in Gov. Charlie Baker's capital budget plan. Proceeds from the sale are expected to fund extensions of the Green Line, South Coast Rail and Knowledge Corridor as well as improvements to South Station and the Fairmount Line along with purchasing orange and red line vehicles. The bonds are secured by a portion of the state's 24 cent gas tax as well as certain Registry of Motor Vehicle fees.