Massachusetts intends to come to market with a $1.1 billion general obligation offering, the second-largest this week in the muni primary.
Bank of America Merrill Lynch is book-running senior manager for the negotiated sale of $600 million of new money consolidated loan Series 2016A bonds and $501 million of 2016A refunding bonds, both fixed-rate. Wells Fargo is co-senior manager.
Thursday's pricing will follow a one-day retail order period. The commonwealth expects a March 17 closing.
The Los Angeles Unified School District was scheduled to price $1.2 billion on Tuesday.
The state intends to use sale proceeds to finance capital projects and advance refund some portions of outstanding GOs issued from 2007 through 2009. Massachusetts has estimated savings of $73 million on a present value basis and almost $100 million on a gross basis.
Massachusetts has $20.3 billion of bonds outstanding as of Oct. 31, 2015, according to documents.
Maturities will extend to 2046 for new money, 2033 for refunding. Calls are eight and 10 years, respectively.
Moody's Investors Service rates Massachusetts GOs Aa1, and while Fitch Ratings and Standard & Poor's rate them AA-plus. Moody's and Fitch assign stable outlooks. S&P in November lowered its outlook to negative, citing a decline in reserves.
After raising its stabilization fund balance from $670 million in fiscal 2010 to $1.65 billion in 2012, subsequent draws have reduced the balance to $1.25 billion as of June 15, still one of the highest in the nation.
"We had viewed the policy of setting aside above-trend capital gains tax during good times as a positive budget management tool that could mitigate potential future budget volatility," S&P said in its presale report. "Reduction of reserves could contribute to a lower rating over the two-year outlook horizon if we feel that financial flexibility is impaired."
Gov. Charlie Baker's proposed $39.6 billion budget for fiscal 2017 projects a $206 million replenishment into the stabilization, or rainy-day fund.
"The governor and I share a commitment that we must do everything to maintain our credit rating," state Treasurer Deborah Goldberg said at Friday's investor call, the first of 2016. The commonwealth intends to hold such calls roughly one week after each disclosure update throughout the year.