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  • Andrew Napolitano

Deal Will Generate Proceeds That Will Fund Six New Rail Projects Throughout Massachusetts

BOSTON — The State Treasurer’s Office announced today that it has successfully completed the sale of its Commonwealth Transportation Fund (CTF) Revenue Bonds, 2015 Series A. The transaction, led by Citigroup, was offered to individual investors on Wednesday, November 4 and opened to institutional investors the following day. While the Commonwealth has issued CTF Bonds before, this represents the first transaction in which proceeds will also be used to pay for portions of the Commonwealth’s Rail Enhancement Program.

“One of the best ways we can ensure that Massachusetts remains the best place in America to start a business or raise a family is investment in our rail infrastructure,” said Treasurer Deb Goldberg. “This deal helps us do that and at a low cost of capital.”

"The successful sale of these very well received bonds is an important step toward making critical investments outlined in the Governor’s Capital Budget Plan for the MBTA and other important transportation initiatives,” said Kristen Lepore, Secretary of the Executive Office for Administration and Finance.

The proceeds of the transaction are expected to be used to fund six rail projects around Massachusetts. They include the Green Line extension, the purchase of orange and red line vehicles, the South Coast Rail extension, Knowledge Corridor, South Station improvements, and Fairmount Line improvements.

The transaction was originally planned to total $450 million. Due to favorable market conditions and consideration of a second expected transaction in December, the size of the deal was increased to $500 million, effectively eliminating the need for the second transaction. Even while increasing the size of the issue, the average interest rate on the bonds was lowered due to investor interest. The additional proceeds are expected to fund portions of the Commonwealth’s Accelerated Bridge Program.

“We consistently look to execute our transactions as efficiently and cost-effectively as possible. Because of strong demand and heavy retail participation, we were able to upsize the total transaction which will save hundreds of thousands of dollars that we would have paid in additional transaction costs had we conducted the originally-planned second sale in December. Wrapping in that deal also allowed us to reduce market risk. We don’t know what is going to happen in December; now we don’t need to” said Sue Perez, Assistant Treasurer for Debt Management.

The Commonwealth received over $150 million in orders for individual investor accounts on Wednesday, over half of what it made available on the first day. Remaining bonds were sold during the institutional sale the following day with a tightening in prices due to high demand. The bonds represent the fifth issue under the Commonwealth Transportation Fund, the state’s strongest credit with ratings of AAA/Aaa from S&P and Moody’s. The bonds are secured by a portion of the 24 cent gas tax as well as certain RMV fees.



Andrew Napolitano

Communications Director

(617) 367-9333 x614

Cell: (781) 403-0600


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