Fitch to Confirm S-T 'F1+' Rating on Massachusetts GOs 2006 Consol. Loan (VRDBs) Series A

NEW YORK--()--On the effective date of Aug. 8, 2014, Fitch Ratings will confirm the 'F1+' short-term rating assigned to the $150,000,000 Commonwealth of Massachusetts general obligation bonds, consolidated loan of 2006 (variable rate demand bonds) series A. The rating action is in connection with: (i) the substitution of the liquidity support currently provided by Wells Fargo Bank, N.A. (rated 'AA-/F1+', Stable Outlook) in the form of a Standby Bond Purchase Agreement (SBPA), with a new SBPA to be issued by Wells Fargo Bank, N.A. which will occur on Aug. 8, 2014.

KEY RATING DRIVERS:

On the effective date, the short-term 'F1+' rating will continue to be based on the liquidity support provided by Wells Fargo Bank, N.A., in the form of a SBPA. The long-term rating continues to be based on the 'AA+' rating assigned by Fitch to the Commonwealth of Massachusetts GO bonds. The Rating Outlook is Stable for the long-term rating. For more information on the long-term rating, see the report dated July 25, 2014, available on Fitch's website at www.fitchratings.com.

The substitute SBPA provides for the payment of the principal component of purchase price plus an amount equal to 35 days of interest calculated at a maximum rate of 12%, based on a year of 365 days for tendered bonds during the daily and weekly rate modes in the event that the proceeds of a remarketing of the bonds are insufficient to pay the purchase price following an optional or mandatory tender. The substitute SBPA will expire on Aug. 8, 2017, the stated expiration date, unless such date is extended, conversion to a mode other than daily or weekly rate, or upon the occurrence of certain events of default which result in a mandatory tender or other events of default related to the credit of the bonds which result in an automatic and immediate termination. The short-term 'F1+' rating will expire on the expiration or prior termination of the SBPA. The remarketing agent for the bonds is J.P. Morgan Securities LLC.

RATING SENSITIVITIES:

The short-term rating reflects the short-term rating that Fitch maintains on the bank providing liquidity support, and will be adjusted upward or downward in conjunction with the short-term rating of the bank and, in some cases, the long-term rating of the bonds. The long-term rating is exclusively tied to the creditworthiness of the bond obligor and will reflect all changes to that rating.

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:

Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=730736

U.S. Municipal Structured Finance Criteria

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

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Contacts

Fitch Ratings
Primary Analyst
Joseph Staffa, +1 212-908-0829
Senior Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Linda Friedman, +1 212-908-0727
Senior Director
or
Committee Chairperson
Trudy Zibit, +1 212-908-0689
Managing Director
or
Media Relations, New York
Elizabeth Fogerty, +1 212-908-0526
elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Joseph Staffa, +1 212-908-0829
Senior Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Linda Friedman, +1 212-908-0727
Senior Director
or
Committee Chairperson
Trudy Zibit, +1 212-908-0689
Managing Director
or
Media Relations, New York
Elizabeth Fogerty, +1 212-908-0526
elizabeth.fogerty@fitchratings.com