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Massachusetts Clean Water Trust to sell $355 million in Green and Sustainability Bonds

Bonds will be first of its kind in the nation issued for State Revolving Fund Projects and target the most disadvantaged communities in the Commonwealth

The State Treasurer's Office announced today that the Massachusetts Clean Water Trust (the Trust) will be selling $355,470,000* State Revolving Fund Series 23A and Series 23B Bonds on April 28th and 29th. The proceeds will be used to finance projects across Massachusetts that adhere to the environmental and health standards of the Clean Water Act and the Safe Drinking Water Act.

The $143,210,000* Series 23A will be the Trust's sixth Green Bond issuance, continuing a program that was launched in 2014. The $212,260,000* Series 23B will be the first issuance of Sustainability Bonds for the Trust and for any state revolving fund (SRF) program in the country, and will provide investors an opportunity to support Massachusetts communities identified as the most economically disadvantaged.

"As Chair of the Clean Water Trust, I am proud of the work we are doing to lead the nation in the first of this type of bond issuance for state revolving funds," said Treasurer and Receiver General Deborah B. Goldberg. "This sale demonstrates strong demand for the Trust's bonds and support for important infrastructure projects that improve drinking water and protect our environment across the state."

The Trust, in collaboration with the Massachusetts Department of Environmental Protection (MassDEP), helps communities build or replace water quality infrastructure that enhances ground and surface water resources, ensures the safety of drinking water, protects public health, and develops resilient communities. It accomplishes these objectives by providing low-interest loans and grants to cities, towns and water utilities through the Massachusetts SRF programs, which are pooled, revolving loan funds. The SRFs are created and managed through a partnership between the EPA and the Commonwealth, and function like an environmental infrastructure bank by financing water infrastructure projects at a subsidized rate to the communities.

Projects financed with the Series 23A and Series 23B Bond proceeds are selected based on criteria that identifies the most relevant public health and environmental related projects while adhering to the standards of the Clean Water Act and the Safe Drinking Water Act; as such, both fund "green" projects. The Series 23A Bonds are designated by the Trust as "Green Bonds" and are expected to provide environmental benefits.

The Series 23B bonds are designated by the Trust as "Sustainability Bonds" and are expected to provide both environmental and social benefits. It's proceeds will finance projects in communities identified as the most disadvantaged, based upon an affordability criteria developed by the Trust and supports additional reductions in interest rates, mitigating the construction costs of these critical infrastructure projects. The criteria apply an Adjusted Per Capita Income ("APCI") formula based on per capita income, employment rate and population change. The communities selected are those with an APCI metric lower than sixty percent of the Commonwealth's APCI.

The municipal market has experienced tremendous growth in environmental, social and governance ("ESG")-driven "impact" opportunities, as investors increasingly seek investments with a positive effect. This interest has resulted in significant growth in Green, Social and Sustainability Bond issuance in recent years. Continuing its market leadership, the Trust is designating its first Sustainability Bonds through its Series 23B Bonds issuance. The Trust intends that the proceeds of the Series 23A Bonds and Series 23B Bonds will be used in a manner that tracks guidelines established by the International Capital Markets Association (ICMA) and is intended to be consistent with select United Nations Sustainable Development Goals (UN SDGs).

According to Sue Perez, Executive Director of the Trust, "We are very excited to be selling these Sustainability Bonds, the first ever for any SRF program nationally. It's very unique to have a combination of Green Bonds and Sustainability Bonds in a single issuance, and the Trust is proud to be able to designate our bonds this way to meet the growth in investor demand for environmentally and socially beneficial products. Additionally, these bonds are offered at the strongest credit rating levels -- triple 'A' from three rating agencies -- so there is the highest level of investor security."

The Trust's State Revolving Fund Bonds, Series 23A and Series 23B will be offered by negotiated sale with a retail order period on Wednesday, April 28th and an institutional order period on Thursday, April 29th. The bonds will settle for delivery on Tuesday, May 11th. The underwriting syndicate will be led by Morgan Stanley as the book-running senior manager and Jefferies LLC and RBC Capital Markets as the co-senior managing underwriters.

* Preliminary, subject to change.




Andrew Napolitano

Communications Director

(617) 367-9333 x614

Cell: (781) 403-0600


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