Featured Municipal Bond in the Market, Week of 03/27/2017: Commonwealth of Massachusetts General Obligation Bonds (Green Bonds)  – $778 Million

This week’s featured bond comes from the Commonwealth of Massachusetts. Massachusetts is issuing general obligation and general obligation green bonds in the amount of $778 Million the week of March 27, 2017. The bonds consist of three series. Series A are $400 million in general obligation bonds to be used to finance and reimburse capital expenditures included within the “FY2017-FY2021 Five-Year Capital Investment Plan” established by the Commonwealth’s Executive Office for Administration and Finance. One project included in the Plan for which capital spending is anticipated during FY 2017 is the extension of the Massachusetts Bay Transportation Authority’s Green Line from Cambridge into Somerville and Medford. Series C are $278 million in general obligation refunding bonds, expected to refund previously issued general obligation bond series from 2009, 2011, 2013, and 2014.

Series B is $100 million in general obligation green bonds. Green bonds are used to finance projects that are designed to be environmentally beneficial. Designating general obligation bonds as green bonds allows investors to directly in environmentally beneficial projects. Although not limited to these criteria, Massachusetts green bond projects commonly fall into one or more of the following categories:

  • Clean Water and Drinking Water Projects
  • Energy Efficiency and Conservation Projects in State Buildings
  • Open Space Protection and Environmental Remediation Projects
  • River Revitalization and Preservation and Habitat Restoration Projects

The proceeds of the green bonds will be tracked by the Commonwealth and deposited into a segregated account. Annual reports on the net proceeds are expected to be issued until all proceeds are expended. Reports will be posted on Massachusetts’ Investor Website, www.massbondholder.com. Green bonds are general obligations, and the holders of the bonds do not assume any specific project risk related to any of the funded projects. All three general obligation series are secured by the full faith and credit of the Commonwealth. Further details on the purposes, security, and other matters pertaining to these general obligation bonds and general obligation green bonds can the found in the preliminary official statement, provided by MuniOS.

The Commonwealth of Massachusetts has an unemployment rate of 4.2% as of February 2017, which is 0.5% lower than the national rate, and 0.2% lower than the same time in 2016. The chart below shows the changes in the U.S. and Massachusetts unemployment rates for the past ten years. MuniNet provides this data and more, easily accessible, for all 50 states and each Metropolitan Statistical Area in the country, in our Employment Database.

green bondsProvided at left is a quick snapshot of financial characteristics of the Commonwealth of Massachusetts as of 06/30/2016, along with the medians for other U.S. States for 2015-2016, courtesy of Merritt Research Services, LLC. Merritt has many of the sector medians publicly available and regularly updated on their Benchmark Central page. (Merritt believes the data to be reliable but does not make any representations as to its accuracy or completeness)In addition to the Merritt information related to the featured bond, more information can be found on our municipal bond calendar, city, state, and county pages, and our employment database.

These facts and numbers are for informational purposes, and should not be considered an official disclosure for potential investors. Investors should consult the official statement. None of the information provided should be construed as a recommendation by MuniNet Guide, MuniNet LLC, Merritt Research Services LLC, or any of their employees. Information and analysis is for informational purposes only.