MASSACHUSETTS GREEN BOND SALE SEES STRONG INVESTOR DEMAND $350 Million Sale Nearly Three Times Oversubscribed Separate Bond Refinancing to Save Taxpayers $45 Million

MASSACHUSETTS GREEN BOND SALE SEES STRONG INVESTOR DEMAND

$350 Million Sale Nearly Three Times Oversubscribed

Separate Bond Refinancing to Save Taxpayers $45 Million

Treasurer Steven Grossman today announced that the Commonwealth’s latest sale of Green Bonds generated tremendous interest from both retail and institutional investors, with orders exceeding $1 billion coming in for $350 million worth of bonds.  This is the second time that Massachusetts has sold bonds with proceeds that are dedicated to fund environmentally beneficial projects across the state, and it follows in the footsteps of the Commonwealth’s first-of-its-kind Green Bond sale last year.

  

 “Green Bonds were a resounding success when we first offered them, and this sale proves that the appetite remains strong,” said Treasurer Steven Grossman. “Investors are excited when they see the Commonwealth’s highest-ever bond rating, prudent fiscal management and strong economic outlook, and Green Bonds give them one more reason to enthusiastically invest in Massachusetts.”

The bond sale began on Monday, September 15^th.  Retail investors were given the opportunity to place orders from Monday through Wednesday before institutional investors were allowed to place orders starting on Thursday.  Over the course of the three-day retail-only order period, the Commonwealth received nearly $260 million in orders from retail investors.  The strong overall demand for the Green Bonds led to lower yields on the bonds, with some bonds being sold at lower yields than the municipal market’s AAA yield curve.  The general obligation bonds are rated AA+.

Also part of this week’s sale, the state sold $429.445 million in refunding bonds to refinance certain outstanding bonds. The refinancing will reduce the state’s interest costs by over $45 million.  Taken together, the Green Bond sale and the bond refunding have a total interest cost of 2.13 percent.

The Commonwealth has identified four categories of projects that are expected to be funded from the sale:

·       Clean water & drinking water projects;

·       Energy efficiency and conservation projects in state buildings;

·        Land acquisition, open space protection & environmental remediation projects; and

·       River revitalization & preservation and habitat restoration projects.

In addition to those four categories, one large project has been identified that will be funded with proceeds of the Green Bond sale, the New Bedford Marine Commerce Terminal project.  The New Bedford Marine Commerce Terminal will be the first facility in the nation designed to support the construction, assembly, and deployment of offshore wind projects.  As part of construction, the project is expected to include the dredging and removal of approximately 250,000 cubic yards of contaminated sediment caused by industrial waste generated during the 1930’s and 1940’s as well as the creation of environmental and habitat restoration areas.