Massachusetts conducted its two recent bond deals at what state officials Tuesday called unprecedented low interest rates.
Last week’s $400 million general obligation bond sale with a total interest cost of 3.42%, and a $1.2-billion short-term revenue anticipation note sale at a borrowing cost of 9.8 basis points, or .098%, were the most highly competitive sales that commonwealth has seen in recent memory, according to Treasurer Steven Grossman and Secretary of Administration and Finance Jay Gonzalez.
Bank of America Merrill Lynch won the competitive bid for the GO bonds, while a series of investment banks including Morgan Stanley, JPMorgan, Citi, Jefferies & Co., and Wells Fargo led competitive bidding for the revenue anticipation notes.
Grossman and Gonzalez cited steps to enhance financial disclosures to investors. Over the past year-and-a-half, state officials have taken steps to bolster outreach to investors, such as hosting an investor conference to highlight the state’s competitiveness and offer presentations to potential investors.
In September 2011, Standard & Poor’s raised the commonwealth’s rating AA-plus from AA, joining Fitch Ratings and Moody’s Investors Service at that level.