BOSTON, MA – Thursday, April 16, 2015 – State Treasurer Deb Goldberg announced today that Moody’s, Standard & Poor’s and Fitch, maintained their respective bond ratings of Aa1/AA+/AA+ and affirmed stable economic outlooks ahead of the Commonwealth’s next competitive offering.

State general obligation ratings are largely based on four main factors: the state’s economy, financial position, debt and financial management, and long-term liabilities. While Massachusetts is considered to have a relatively high debt level, it is explained in part by the heavier role the Commonwealth takes in the financing of local projects, often handled at the county level in many other states. Massachusetts’ strong financial management practices and Budget Stabilization Fund levels are generally viewed as credit strengths for the Commonwealth.

I am pleased that the rating agencies have recognized our decisive and effective actions on the Fiscal Year 2015 and 2016 budgets and the experienced team we have assembled to lead the Commonwealth’s fiscal management,” said Governor Charlie Baker. “Our cooperation with the Legislature, Treasurer, and other state officials has led to a strong fiscal foundation for our economy. Maintaining the highest bond rating in the Commonwealth’s history will provide the access to capital markets we need to begin executing our capital budget plan.

What a difference  a couple of years makes.


from the DLS - UNDERSTANDING MUNICIPAL DEBT May 2016

Communities in Massachusetts have ongoing responsibilities to create and maintain their capital assets. Hopefully, decisions of this nature are based on capital improvement plans developed by analyzing and prioritizing community needs. It is the treasurer’s responsibility to maintain sufficient cash balances to meet the spending demands of departments within the limits of appropriations. Occasionally, some communities find themselves in need of a short-term infusion of cash for capital or operating purposes. For these and other reasons, Massachusetts General Law authorizes cities and towns to issue debt under certain circumstances and for various durations.



Credit Rating Agencies In Massachusetts, nearly all communities that carry bond ratings are evaluated by either of two rating agencies, Moody’s Investors Service or Standard & Poor’s, although some communities seek ratings from both. While the ratings process appears shrouded in mystery for some, it is important to remember that the city or town is a client of the rating agency, whose function is to render a third-party opinion on the municipality’s likelihood of default. In conducting an assessment, a rating agency will perform analyses of financial statements, management capability, fiscal stability, economic condition, and other data. The process will often include in-person or telephone interviews with municipal finance officials. On less frequent occasions, a ratings analyst will make a site visit to a city or town in an effort to gain a more substantial understanding of the community’s assets and management capabilities. Later, the agency will issue a concise, written report that presents the rating assignment and describes the community’s financial position. Purchasers of municipal bonds and notes use this rating when considering their bids. Typically, the better rated credits garner lower interest rate charges.

posted by Jeff Bennett