Massachusetts plans to sell $818M of GOs

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Massachusetts intends to sell $818 million of general obligation bonds competitively Wednesday, including a $218 million refunding.

“We’re gearing up for a few new deals,” state Treasurer Deborah Goldberg said at Wednesday’s third and final investor call of the year. Goldberg last week was selected secretary-treasurer of the National Association of State Treasurers for 2018.

The commonwealth will issue $600 million in new money through equal $300 million tranches of Series E and F bonds, according to deputy treasurer for debt management Sue Perez.

The refunding portion of Series E is for bonds issued in 2011 and 2012.

S&P Global Ratings in June handed Massachusetts its first downgrade by a major bond-rating agency since 1990 when it lowered the commonwealth’s GOs to AA from AA-plus, affecting roughly $22 billion in debt. S&P cited the failure by state officials to follow through on rainy-day replenishment despite economic growth above the national average.

Massachusetts’ fiscal 2018 budget projects a $98.4 million deposit to the stabilization fund, which according to state budget secretary Michael Heffernan would raise the balance to nearly $1.4 billion.

Fitch Ratings assigns an AA-plus rating to Massachusetts GOs, while Moody’s Investors Service rates them Aa1.

Massachusetts also plans to competitively sell $142.6 million in Series 2017A federal highway grant anticipation notes on Nov. 1 and hold a negotiated sale of $500.9 million of commonwealth transportation fund revenue bonds Nov. 8.

The GAN sale will feature $75 million in new money and $67.6 million in refunding, with proceeds to fund additional costs of the Accelerated Bridge Program and refund other GANs.

The CTF issuance will involve $350 million in new money and a $150.9 million refunding. New money proceeds will fund costs under bridge and rail enhancement programs, while the refunding will cover prior CTF bonds.

Since May, Massachusetts has sold nearly $783 million of GO new money and refunding bonds competitively, remarketed $200 million of 2014 Series D2 multimodal bonds, entered into a standby bond purchase agreement for $136.9 million of 2006 Series A variable rate demand bonds, executed the replacement of a direct placement for $163.9 million of Series 2001B refunding bonds and issued $1.5 billion of revenue anticipation notes for cash-flow borrowing.

“We’ve been a little busy,” said Perez.

Massachusetts has scheduled its seventh annual investor conference for Nov. 15 at the Boston Convention and Exhibition Center. The keynote speaker is Kevin O’Leary, a star of ABC-TV’s “Shark Tank.”

Topics throughout the day will include pensions, mass transit, the commonwealth’s long-term challenges and preparations for the long-term economy.

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Sell side Primary bond market Deborah Goldberg Commonwealth of Massachusetts Massachusetts