Fitch Rates Massachusetts Development Finance Agency's $30.6MM 2015A Bonds 'AA+'; Outlook Stable

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

--$30,570,000 special obligation bonds (Commonwealth contract assistance) series 2015A.

The bonds are scheduled to be sold through negotiation on or about May 5, 2015.

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

COMMONWEALTH CREDIT QUALITY: 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 Boston Landing mixed-use development project in Boston, 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. At present, up to $600 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 of Massachusetts (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's press release 'Fitch Rates $550MM Massachusetts GO Bonds 'AA+'; Outlook Stable', dated April 16, 2015 and 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=983535

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Contacts

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

Contacts

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