Massachusetts will return to the market Tuesday when it sells $350 million of general obligation bonds through competitive sale.
Treasurer Steven Grossman and other officials feel they have a story to tell — and plan to open themselves even more to investors.
Grossman is striving to make Massachusetts a leader for investor disclosure, including direct investor communication.
“Massachusetts is taking a series of unprecedented steps to set the highest possible standards in terms of market disclosure,” Grossman said.
Colin MacNaught, assistant treasurer for debt management, said the department has been working on disclosure for several months.
Massachusetts plans to update disclosure every other month, beginning in January, regardless of whether a bond sale is scheduled. But “we will try to issue bonds around those dates.” MacNaught said. “This is an important change because we want to be more predictable in terms of when we issue bonds — we think that will help how we price because investors can better position their portfolios ahead of time.”
Massachusetts intends to follow up disclosure with live investor conferences. It held such a call Monday afternoon, for 35 investors. “We are committed to doing these calls whether we are in the market selling bonds or not because we want investors to have access to senior state officials to ask questions about the credit on a consistent basis,” MacNaught added.
With each call, the state intends to make experts available to discuss priority topics. For example, for the July call, the Department of Revenue is scheduled to review revenue collections for fiscal 2012. In November, the state actuary will be expected to review a report that it will have released one month earlier.
Other enhancements include a dedicated investor website and a Twitter account, with a mid-June target date for the site launch, and more voluntary postings to the Municipal Securities Rulemaking Board’s EMMA site.
Treasury officials are also working to make documents easier to read, rewriting the pension section to comply with National Association of Bond Lawyers recommendations and adding an economic narrative section to complement statistics.
Fitch Ratings assigns a AA-plus rating to the state’s GO bonds. Moody’s Investors Service rates them Aa1. Standard & Poor’s gives them a AA-plus. Standard & Poor’s upgraded the rating in September from AA.
Fitch cited the state’s wealthy economy and prudent financial management as key rating drivers, but warned that the state’s debt levels will remain high.
“Massachusetts’ current financial position has stabilized following a period of steep decline in the recession,” Fitch said in a report it issued Friday, citing 13.5% year-over-year growth in personal income taxes in 2011, which enabled Massachusetts to push its rainy-day fund balance to $1.4 billion.
The state has $18.5 billion of GO debt outstanding, as of Dec. 31.
Grossman said the high ratings helped save the state $23.5 million in overall borrowing costs in its $419.3 million bond sale on May 8 under the accelerated bridge program.
Public Resources Advisory Group is the financial advisor for Tuesday’s Series 2012B bond sale. Nixon Peabody LLP is bond counsel and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC is disclosure counsel.
The bonds will mature from 2023 to 2042.
Massachusetts has also issued a request for qualifications for investment banking and underwriting services.
