State Finance and Governance Board Meeting June 26, 2025

Notice of Public Meeting

In accordance with Section 20 of Chapter 20 of the Acts of 2021, as extended by Chapter 107 of the Acts of 2022, this meeting will be conducted, and open to the public, via Zoom and Teleconference.

Meeting ID: 820 3133 5207

Passcode: 559071

Teleconference line: 1-646-931-3860; Phone Conference code: 559071#

The meeting was called to order at approximately 11:00 a.m.

Board members comprising a quorum:

Brent Andersen, Pilgrim Bay Insurance

Kaitlyn Connors, Executive Office for Administration and Finance, Board Interim Chair

Sue Perez, Office of the State Treasurer

Others in attendance:

Anne Lewis, Massachusetts Housing Partnership (MHP)

James Rust, Massachusetts State College Building Authority (MSCBA)

Poonam Patidar, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C

Cory Bannon, Office of the State Treasurer

Victoria Gudaitis, Executive Office for Administration and Finance

1. Administrative Matters

Ms. Connors called the meeting to order and conducted the roll call. On a motion made by Ms. Perez and duly seconded by Mr. Andersen members voted unanimously to approve the February 21, 2025, meeting minutes. Ms. Connors then moved to the next agenda item: Waiver Requests.

2. Discussion

• No discussion matters scheduled.

3. Waiver Requests

Massachusetts State College Building Authority (MSCBA)

Mr. James Rust, Deputy Director and Chief Financial Officer of the Massachusetts State College Building Authority (MSCBA) presented MSCBA’s waiver request to the State Finance and Governance Board (the “Board”).

Mr. Rust explained that the MSCBA was established as a public instrumentality for the general purpose of providing residence halls, dining commons, parking, athletic, cultural, and other student activity facilities of Massachusetts state universities and community colleges,  and noted that MSCBA projects are financed with bonds secured by: (i) a pledge of revenues from the colleges to the Authority; (ii) a pledge by the Board of Higher Education under a Contract for Financial Assistance, Management and Services; and (iii) a Commonwealth appropriation intercept, if the Authority otherwise lacks sufficient funds to pay debt service. 

Mr. Rust noted that the MSCBA has separate credit structures for bonds issued to finance or refinance projects at state universities and for bonds issued to finance or refinance projects at community colleges. He explained that this waiver request relates to the state university program through which MSCBA has $1.1 billion in outstanding bonds issued to fund projects on state university campuses.  He noted that the bonds are rated Aa2 and AA by Moody's and S&P Global, respectively.

Mr. Rust then reported that the MSCBA has an opportunity to issue tax-exempt refunding bonds to refund the 2015A Bonds and the 2016A Bonds in July or August 2025. There may also be an opportunity for MSCBA to issue tax-exempt refunding bonds to refund other prior bonds of the Authority to achieve present value and annual debt service savings. Additionally, the MSCBA plans to issue approximately $15 million of tax-exempt new money bonds to fund projects at several of the state university campuses, which would likely be combined with one or more of the above-mentioned refunding opportunities to achieve cost of issuance efficiencies.

Mr. Rust reported that refunding and restructuring transactions may be more efficiently issued using a negotiated method of sale, given these transactions are complex and require concurrent selection of the bonds to be refunded, pricing of the bonds being sold, and investment of bond proceeds to maximize efficiency and noted that negotiated transactions can be more flexible in terms of timing of issuance to take maximum advantage of favorable market conditions.

Ms. Connors then asked if any board members had any questions. There were no questions from board members.  

On a motion made by Mr. Andersen and duly seconded, the Board voted unanimously to grant a waiver from the presumption of a competitively bid financing to the Massachusetts State College Building Authority with respect to the issuance of refunding and new money bonds for its state university program in a par amount not to exceed $100,000,000 and that the Authority be authorized to sell such bonds, in one or more issues, on a negotiated basis not later than September 30, 2025.

4. Derivative Reviews

Massachusetts Housing Partnership (MHP)

Massachusetts Housing Partnership (MHP) Director of Capital and Program Development, Ms. Anne Lewis presented MHP’s derivative review to the State Finance and Governance Board (“the Board”).  Ms. Lewis explained that MHP is seeking a six-month renewal of MHP’s forward-starting swap program, which is a programmatic reauthorization, approved by the MHP Board of Directors on June 17, 2025, based on the analysis and recommendation of MHP’s independent swap advisor, Chatham Hedging Advisors. This renewal grants MHP up to $36.75 million in swap authority for the period July 1, 2025, through January 31, 2026.  Ms. Lewis reported that this request is nearly identical to the requests that the SFGB has reviewed in the past, with the most recent proposal having been reviewed by the Board on January 16, 2025.    

Ms. Lewis explained that the swap program allows MHP to execute forward starting interests rate swaps to protect against movement in interest rates that occur over the construction or rehab period for the multifamily loans where MHP is providing permanent loans. She noted that this authorization will allow MHP to continue to offer this spending option to its borrowers, and that supporting documents were submitted to the Board in advance of the meeting, including MHP’s financial advisor Chatham Hedging Advisors written analysis and recommendation, as well as a summary of MHP’s swap exposure and performance relative to MHP policy limits.   

Ms. Connors asked if MHP anticipated utilizing the relatively new program being offered by the Department of Housing and Urban Development (HUD). Ms. Lewis noted that MHP continues to monitor new HUD offerings, but at this time MHP does not anticipate utilizing the program, given the terms of the HUD program are less advantageous than MHP’s current program. 

Ms. Connors then asked if any board members had any questions. There were no questions from board members. 

On a motion from Ms. Perez, and duly seconded by Mr. Andersen, the Board unanimously voted that the State Finance and Governance Board has received satisfactory information regarding the transaction terms related to Massachusetts Housing Partnership’s forward-starting swaps in the aggregate notional amount not to exceed $36,750,000 to be executed between July 1, 2025, and January 31, 2026, and deems the transaction reviewed with no additional conclusions required.

5. Closed Transactions/Bond Sale Reviews
   • No discussion matters scheduled.
6. Discussion on Board Activities
   • No matters scheduled.
7. Adjournment

On a motion made by Mr. Andersen, and duly seconded by Ms. Perez, members voted to adjourn. The meeting officially adjourned at approximately 11:20 AM.

___________________________________________________

Kaitlyn Connors, Acting Chair

1. Administrative Matters

• Adoption of meeting minutes from February 20, 2025 (Vote)

2. Discussion: No matters formally scheduled
3. Waiver Requests:

• MA State College Building Authority (Vote)

4. Derivative Reviews:

• Massachusetts Housing Partnership (Vote)

5. Closed Transactions/Bond Sale Reviews: No matters formally scheduled
6. Discussion on Board Activities: No matters formally scheduled
7. Adjournment