Commonwealth Bond Rating Affirmed

Affirmation comes days before Massachusetts’ next scheduled bond sale

May 15, 2009 – State Treasurer Tim Cahill announced today that the Commonwealth’s bond ratings have been affirmed ahead of its next General Obligation bond sale. On Friday, Fitch Ratings, Moody’s Investor Services and Standard & Poor’s all affirmed the Commonwealth’s credit ratings at AA, Aa2, and AA, respectively. All three firms’ rating outlooks are ‘stable’.

“This is very good news for the Commonwealth and for our taxpayers,” said Treasurer Cahill. “Credit matters in today’s markets. Even though the state’s balance sheet has taken a little hit with the sharp decline in revenues, the Commonwealth as a credit remains strong because of the strong economy, conservative management of debt and proactive leadership.”

"This reaffirms that despite the difficult challenges we are facing, the rating agencies recognize that we are aggressively and effectively managing the Commonwealth's finances,” said Secretary for Administration & Finance Leslie Kirwan. “Maintaining our strong credit rating will allow us to continue making needed investments in the Commonwealth's roads, bridges, schools and other infrastructure, positioning Massachusetts for long-term economic growth and prosperity."

The ratings were assigned ahead of the Commonwealth’s upcoming bond sale, which will take place next week. Approximately $300 million in bonds will be sold to individual investors only on Monday, May 18^th and Tuesday, May 19^th, with orders from Massachusetts residents receiving top priority. Following the two-day retail-only sale, the Commonwealth will sell bonds competitively to institutional investors on Wednesday, May 20^th.

The bond sale is expected to generate more than $600 million in bond proceeds, which will be used to finance capital investment in public infrastructure across the Commonwealth.

Since March of 2005, the Commonwealth’s ratings on its General Obligation Bonds have been ‘AA’. Bond ratings are an independent opinion of the general creditworthiness of an obligor, such as the Commonwealth, based on relevant risk factors. Ratings are based on an issuer’s ability to repay fully the principal and interest of its short-term or long-term debt obligations, on a timely basis. For General Obligation bonds, ratings are based primarily on four main factors: the economy, the issuer’s financial position, the issuer’s current and future debt burden, and financial management.

For more information on the Commonwealth’s bond ratings or about the upcoming sale, please visit www.buymassachusettsbonds.com.

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