Fitch Rates Massachusetts Dev Fin Agency $10MM 2014C Bonds 'AA+'; Outlook Stable

NEW YORK--()--Fitch Ratings has assigned an 'AA+' rating to the following Massachusetts Development Finance Agency special obligation bonds:

--$10 million special obligation bonds (Commonwealth Contract Assistance) Series 2014C.

The bonds are scheduled to be sold through negotiation on or after June 12, 2014.

In addition, Fitch affirms the 'AA+' rating on the agency's outstanding special obligation bonds (Commonwealth Contract Assistance) series 2010, 2014A and 2014B.

The Rating Outlook is Stable.

SECURITY

The bonds are secured by a contract between the Commonwealth of Massachusetts and the agency that requires the Commonwealth to make payments in amounts equal to 100% of debt service.

KEY RATING DRIVERS

COMMONWEALTH'S PLEDGE: The Commonwealth's obligation under the contract to make payments equal to debt service is a general obligation of the Commonwealth, to which its full faith and credit are pledged. The agency pledges and grants to the trustee on behalf of bondholders a security interest in the contract, including all of the Commonwealth's payments for debt service.

'AA+' MASSACHUSETTS GO RATING: Fitch rates the Commonwealth's general obligation (GO) debt 'AA+' with a Stable Outlook. The 'AA+' rating reflects considerable economic resources and a record of prudent financial management. Credit strengths are tempered by a comparatively heavy debt burden that Fitch expects to remain high. The Stable Outlook reflects the expectation that the Commonwealth will continue to act as needed to ensure budget balance and maintain an adequate budgeted reserve position.

RATING SENSITIVITIES

The rating is sensitive to changes in the Commonwealth's general obligation credit standing, upon which the rating for the bonds is based.

CREDIT PROFILE

The bonds are being issued for public infrastructure improvements for the Chestnut Hill Square project in Newton, Massachusetts as part of the Commonwealth's Infrastructure Investment Incentive ('I-Cubed') program. The program was created by statute passed in 2006 and amended in 2008 and 2012. Up to $325 million in agency bonds are authorized for public infrastructure improvements to support economic development projects.

The bonds are special obligations of the agency, payable solely from a contract with the Commonwealth (acting through the secretary of the executive office for administration and finance). Pursuant to the contract, the Commonwealth makes payments to the trustee no later than one business day prior to debt service payment dates in amounts sufficient to provide for the full amount of debt service. The Commonwealth's obligation to make such contract assistance payments is a GO of the Commonwealth, to which its full faith and credit are pledged. Consequently, the rating is the same as that accorded to the Commonwealth's own GO bonds. The agency has pledged and granted to the trustee a security interest in the contract, including the Commonwealth's payments under the contract.

Fitch rates GO debt of the Commonwealth of Massachusetts 'AA+' with a Stable Rating Outlook. For more information on the Commonwealth, see Fitch Research 'Fitch Rates $200MM Massachusetts GO Bonds 'AA+'; Outlook Stable ' dated May 15, 2014, available at www.fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

In addition to the sources of information identified in Fitch's report 'Tax-Supported Rating Criteria', this action was additionally informed by information from the underwriters.

Applicable Criteria and Related Research:

--'Tax-Supported Rating Criteria', Aug. 14, 2012;

--'U.S. State Government Tax-Supported Rating Criteria', Aug. 14, 2012.

Applicable Criteria and Related Research:

Tax-Supported Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686015

U.S. State Government Tax-Supported Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686033

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=830352

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Contacts

Fitch Ratings
Primary Analyst
Laura Porter, +1-212-908-0575
Managing Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Douglas Offerman, +1-212-908-0889
Senior Director
or
Committee Chairperson
Marcy Block, +1-212-908-0239
Senior Director
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526 (New York)
elizabeth.fogerty@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst
Laura Porter, +1-212-908-0575
Managing Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Douglas Offerman, +1-212-908-0889
Senior Director
or
Committee Chairperson
Marcy Block, +1-212-908-0239
Senior Director
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526 (New York)
elizabeth.fogerty@fitchratings.com