ON EARTH DAY, TREASURY READIES NEXT ROUND OF “GREEN BOND” SALES
Commonwealth to Build on the
Success and Innovation of Initial Offering Last Year
Treasurer
Steven Grossman today announced that the Commonwealth is preparing to offer
another round of “Green Bonds” to investors, building on the success of
Massachusetts’ first-in-the-nation environmentally oriented bond sale last
year. The bond sale, announced on Earth
Day, will occur this summer and will offer investors an investment option that
directly funds environmentally beneficial infrastructure projects.
“Green
Bonds were a resounding success when we first offered them, and we anticipate
that there will be a very strong appetite for this upcoming sale,” 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.”
Last year’s $100 million Green Bonds sale was
part of an overall $670 million bond sale that occurred between May 31 and June
4, 2013. These general obligation bonds
were assigned ratings of AA+, Aa1 and AA+ from Fitch, Moody’s and Standard
& Poor’s respectively.
In the first issuance,
Green Bonds proceeds were used to finance projects in the following four
categories:
· Clean water and
drinking water projects;
· Energy efficiency and
conservation projects in state buildings;
· Land acquisition, open
space protection and environmental remediation projects; and
· River revitalization
and habitat restoration projects.
In addition to funding environmentally
beneficial projects, Grossman said that Green Bonds appeal to a wider range of
bidders, thereby increasing competition and potentially lowering borrowing
costs for the Commonwealth. He said the
bonds are appealing to pension funds and endowments that are required to
dedicate a portion of their holdings to green initiatives, spurring interest
among some large institutional investors that might not otherwise buy
Massachusetts bonds. Other issuers of Green Bonds include the World Bank, which
since 2008, has issued more than $4.5 billion in such bonds to finance projects
to reduce climate change.
As part of the Green Bond program, the
Commonwealth has committed to releasing quarterly Investor Impact Reports,
which contain specific details on how the proceeds from these bonds are
used. Grossman said that the Reports are
part of an effort to ensure transparency so people can be assured that their investment
is going to fund environmentally beneficial projects.
As
part of the upcoming sale, Massachusetts bonds will also be made available to
retail investors on a priority basis to allow individual investors or their
financial advisors to place orders that would be allotted before those placed
by institutional investors. To view the
most recent Green Bonds Investor Impact Report and to learn more about the previous
Green Bonds sale, people can visit www.mass.gov/treasury.