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Andrew Napolitano

Proceeds to be used to fund Capital Investment Plan Projects


Boston - Today, State Treasurer Deborah B. Goldberg announced that Massachusetts sold two series of General Obligation Bonds for an aggregate issuance par amount of $1.88 billion. The first series was a new money issuance, with proceeds to be used to fund projects in the Capital Investment Plan. The second series was a refunding of existing bonds for savings. This was the first financing of 2024 for the Commonwealth and the first significant high-grade deal of the year in the municipal bond market.


Initially, a retail order period was scheduled for Wednesday. By midday, retail orders received exceeded two-thirds of the par value of the two series. Orders for Massachusetts retail orders totaled $536 million, which was one of the strongest experienced by the state in several years and provided a deep and diverse order book.  Given the magnitude of the retail orders, the institutional order period was accelerated into Wednesday afternoon to take advantage of the momentum as well as market conditions.


Institutional order flow continued to experience the strength experienced in the retail order period.  Overall orders for the financing totaled approximately $3.1 billion and consisted of almost 90 unique investors made up of separately managed accounts, bank trusts, private wealth management, bond funds, hedge funds, insurance companies, money managers, ETFs and bank portfolios, which highlighted the significant amount of cash in the market, despite historically low municipal to US treasury ratios.


Following the close of the institutional order period, Massachusetts upsized both series as well as lowering the yields on selected maturities given the subscription levels. The financing with an average life of 15.7 years achieved an All-in TIC of 3.73%. Present value savings on the refunding series was $127.6 million, which was 13.2 percent of the refunded bonds, following the upsizing of the refunding series. The Commonwealth will next be in the market in February with a current refunding that will be tied to a taxable to tax-exempt tender financing.

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