Fitch Rates Massachusetts Development Finance Agency's $10MM 2015B Bonds 'AA+'; Outlook Stable

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

--$10,000,000 (Commonwealth contract assistance) series 2015B (federally taxable).

The series 2015B bonds are scheduled to be sold through negotiation on or about Aug. 27, 2015.

In addition, Fitch affirms the following ratings on MDFA bonds at 'AA+':

--Approximately $52 million in special obligation bonds (Commonwealth contract assistance).

Fitch's affirmation includes the MDFA's series 2015A bonds, which were originally rated on April 23, 2015 and whose sale was subsequently delayed until Aug. 25, 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 Boylston West 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 is 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's press release 'Fitch Rates Massachusetts' $939MM Massachusetts GO Bonds 'AA+'; Outlook Stable', dated June 12, 2015 and available at 'www.fitchratings.com'.

Additional information is available on www.fitchratings.com

Applicable Criteria

Tax-Supported Rating Criteria (pub. 14 Aug 2012)

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

U.S. State Government Tax-Supported Rating Criteria (pub. 14 Aug 2012)

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

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=989620

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=989620

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Primary Analyst
Douglas Offerman
Senior Director
+1-212-908-0889
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Laura Porter
Managing Director
+1-212-908-0575
or
Committee Chairperson
Marcy Block
Senior Director
+1-212-908-0239
or
Media Relations:
Alyssa Castelli, +1 212-908-0540
alyssa.castelli@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Douglas Offerman
Senior Director
+1-212-908-0889
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Laura Porter
Managing Director
+1-212-908-0575
or
Committee Chairperson
Marcy Block
Senior Director
+1-212-908-0239
or
Media Relations:
Alyssa Castelli, +1 212-908-0540
alyssa.castelli@fitchratings.com