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Fitch Rates $200MM Commonwealth of Massachusetts CP Notes, Series K (Federally Taxable) 'F1+'

NEW YORK--(BUSINESS WIRE)--Fitch Ratings assigns a rating of 'F1+' to the $200,000,000 Commonwealth of Massachusetts commercial paper notes, series K (Federally Taxable) (the notes).

KEY RATING DRIVERS:

The rating is based on the support provided by a liquidity facility, in the form of an Amended and Restated Credit Agreement (credit agreement) issued by TD Bank, N.A. (rated 'AA-/F1+', Stable Outlook by Fitch), which supports payments of principal on the series K notes upon maturity. The credit agreement also supports payments of principal on the tax exempt commercial paper notes, series I which were rated by Fitch on Oct. 31, 2013. The total amount available under the credit agreement is limited to $200,000,000. The Commonwealth has covenanted to only have either the series K notes or the series I notes outstanding at any time. The Commonwealth of Massachusetts is obligated to pay interest upon maturity of the notes. The Commonwealth's long-term rating is 'AA+', Stable Outlook. For information about the underlying credit rating see Fitch's press release dated Aug. 6, 2014, available at 'www.fitchratings.com'. For information about the tax exempt commercial paper notes, series I see the press release dated Oct. 31, 2013 also available at 'www.fitchratings.com'.

The short-term rating on the notes will expire on the earlier of Feb. 17, 2015, the expiration date of the TD Bank, N.A. credit agreement, unless such date is extended, or upon any prior termination of the TD Bank, N.A. credit agreement.

U.S. Bank, National Association, as the Issuing and Paying Agent (IPA) for the notes, is directed to request an advance under the credit agreement whenever proceeds of the sale of rollover notes are insufficient to pay maturing notes. The TD Bank N.A. credit agreement provides sufficient coverage for $200 million in principal amount of notes and the issuer is obligated to pay interest on the notes.

The notes will be issued at par, with interest due at maturity. Following the occurrence of an event of default under the credit agreement, the bank may direct the IPA to immediately stop the issuance of any additional notes. In such event, the credit agreement will expire after all the notes supported by such credit agreement mature and have been paid from funds drawn on the credit agreement. In addition, TD Bank may terminate the credit agreement upon the occurrence of specified immediate termination events. The dealers for the notes are Wells Fargo Securities, LLC and Morgan Stanley & Co. LLC.

RATING SENSITIVITIES:

The ratings reflect the short-term ratings that Fitch maintains on the bank providing liquidity support and will be adjusted upward or downward in conjunction with changes to the short-term rating of the bank and in some cases, the long-term rating of the Commonwealth of Massachusetts.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'U.S. Municipal Structured Finance Criteria', February 24, 2014;

--'Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support', January 27, 2014.

Applicable Criteria and Related Research:

U.S. Municipal Structured Finance Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=736618

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=858635

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
Linda Friedman
Senior Director
+1-212-908-0727
33 Whitehall Street
New York, New York 10004
or
Secondary Analyst
Mario Civico
Senior Director
+1-212-908-0796
or
Committee Chairperson
Trudy Zibit
Managing Director
+1-212-908-0689
or
Media Relations
Elizabeth Fogerty, New York, +1 212-908-0526
elizabeth.fogerty@fitchratings.com