PATRICK-MURRAY ADMINISTRATION JOINS TREASURER GROSSMAN TO ANNOUNCE NEW $1,000 BUILD MASS BONDS
New, smaller bonds allow more of Commonwealth's residents to invest in Massachusetts
Friday, May 20, 2011 -- Governor Patrick joins Lieutenant Governor Murray and Treasurer Steve Grossman for an announcementrelative to the Commonwealth's Bond Program. (Photo credit: Matt Bennett/Governor's Office)
WORCESTER - Friday, May 20, 2011 - Governor Deval Patrick and Lieutenant Governor Timothy Murray, joined by Treasurer Steve Grossman and local legislators, today kicked off the Build Mass Bonds program, which will allow more of the Commonwealth's residents to invest in Massachusetts. The four-day Build Mass Bonds program offers lower-denomination, $1,000 bonds for purchase as part of a roughly $500 million bond issuance that will fund a host of capital projects throughout the state.
"Through our bond program, we have been making targeted investments in our public infrastructure to create jobs and improve the Commonwealth over the long-term," said Governor Patrick. "These new $1,000 Build Mass Bonds give smaller investors a unique opportunity to put their money to work in Massachusetts and help invest in generations to come."
"Governor Patrick and our Administration have worked to be good fiscal stewards of taxpayer dollars, and in return, Massachusetts' bond rating has remained strong," said Lieutenant Governor Murray. "As a result, we are proud to partner with Treasurer Grossman to deliver resources to the business community, including this bond program which supports infrastructure investments and job creation across the Commonwealth."
Massachusetts bonds have historically been sold in $5,000 denominations, and a $1,000 denomination has not been offered to investors for more than two decades. The $1,000 Build Mass Bonds will be offered to individual investors during a special order period beginning today and ending Monday, May 23rd. The remainder of the bonds will be offered to institutional investors starting on Tuesday, May 24th.
"This is all about accessibility, and we are thrilled at the prospect that more Massachusetts residents will have an opportunity to invest in the Commonwealth and in their own future," said Treasurer Grossman. "The credit rating agencies have given Massachusetts a clear vote of economic confidence, and it's encouraging that more individuals will be able to invest their money with the same solid optimism."
During the event, Governor Patrick presented the first $1,000 certificate to business owner Alan Lavine of Worcester.
State officials said that a positive opinion on Wall Street about the Commonwealth's fiscal management will help the state borrow in a cost-effective manner.
Massachusetts' bond rating has not only remained strong, but gotten stronger - one of only two states in America whose outlook is currently positive. Massachusetts holds the second-highest bond rating from both Fitch and Moody's credit rating firms and received a Positive Outlook classification from Standard and Poor's in February of this year. The major international ratings agencies cited the Patrick-Murray Administration's responsible fiscal management and positive economic outlook in their assessment. Since the Administration announced its fiscal year 2012 budget proposal, revenue from bond sales has gone up dramatically and borrowing costs have gone down.
"In the face of unprecedented fiscal challenges over the last few years, we have demonstrated strong, proactive and responsible fiscal management," said Secretary of Administration and Finance Jay Gonzalez. "Wall Street has taken notice, with Standard and Poor's placing a 'positive outlook' on our bond rating. Build Mass Bonds are a great investment in the future of the Commonwealth."
"The Build Mass Bonds program is a call to citizen participation," said Representative Kate Hogan, who helped spearhead the initiative. "This is a terrific and viable investment option, and a great way to support our state."
As a lead-up to the roughly $500 million bond offering, Governor Patrick, Treasurer Grossman, and Secretary Gonzalez participated in a conference call yesterday with the firms underwriting the transaction. The call, thought to be the first time that a Massachusetts Governor and Treasurer worked together to engage the sales force of Commonwealth bond brokers, was designed to stress the importance of the bond sale to the Commonwealth's capital plan and to stress the credit strengths of the Commonwealth relative to other state borrowers.
The interest earned from the Build Mass Bonds is exempt from federal and state taxes. The interest rate on the bonds will be subject to market conditions and will be set this coming Friday, the first day of the offering. The Build Mass Bonds have a two-and-a half year maturity schedule, maturing on February 1, 2014. Other bonds that will be offered in the sale will maturities ranging from 2012 to 2025.
For more information on purchasing the bonds, potential investors can consult with their financial advisor or go to www.buildmassbonds.com.