Cahill Says Short-Term Note Sale Is Best In Massachusetts History

September 15, 2009 - Massachusetts State Treasurer Tim Cahill announced that today’s sale of $1.2 billion in Commonwealth of Massachusetts Revenue Anticipation Notes (or "RANs") was highly successful, with the notes purchased at a rate of 0.31 percent - the lowest rate the state has ever received for a borrowing.

"The Commonwealth has never borrowed at such a low rate," said Treasurer Tim Cahill. "This speaks to the strength of the Commonwealth as a credit, and it shows how much demand there is from investors who want to own Commonwealth securities."

"Investors want to invest in the Commonwealth – that’s a great signal generally and it means lower borrowing costs for the state, which is a win for Massachusetts taxpayers. This also highlights the recovery of the capital markets from the difficulties of last year. We sold notes last year for seven times as much in yield."

Over the course of the note sale, the Commonwealth received bids for more than $10 billion in notes – or close to 10 times the amount of notes actually being offered for sale today.

"Our ability to borrow at historic low rates is great news for taxpayers and for the Commonwealth," said Administration and Finance Secretary Leslie A. Kirwan. "In addition to saving the Commonwealth money, this is a testament to our responsible and aggressive management of the state budget, particularly in these challenging economic times."

The Commonwealth will use the proceeds of the RANs to enhance its cash position over the course of Fiscal 2010. Cash flow borrowings are needed due to the imbalance of revenue collections during the year, with a majority of tax revenues received by the state in the final quarter. The Commonwealth’s cash flow is managed by the State Treasurer’s Office.

The RANs sold today will be repaid in April, May and June 2010. They received the highest short-term ratings from Fitch Ratings, Moody’s Investor Services, and Standard & Poor’s.

For more information on the RANs sale please go to www.mass.gov/treasury/debt or call 617-367-3900.

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