The Massachusetts Bay Transportation Authority, which operates mass transit in greater Boston, issued a combined $300 million of subordinated sales tax bonds and bond anticipation notes, which officials say represent the first tax-exempt sustainability bonds issued in the United States. Further, the bonds were offered as the first issuance under the authority’s subordinated sales tax program.

The sustainability bond framework incorporates feedback from MBTA departments as well as guidance from investor groups and academic leaders. MBTA formed a Sustainability Committee and drafted a Sustainable Bond Framework which addresses: use of proceeds, process for project evaluation and selection, management of proceeds, and reporting.

Proceeds will go exclusively toward projects that benefit the environment or society more broadly. The bonds achieved among the lowest cost of funds for any MBTA sales tax issuance despite the subordinated nature of the debt. Major MBTA projects include $492 million for positive train control safety technology; $332 million toward replacing its old bus fleet with fuel-efficient hybrid vehicles; $99 million to make Boston’s Government Center station handicapped-accessible and climate resilient; and $50 million to protect a critical bus facility in Boston’s Charlestown neighborhood from storms.