The public transit authority that serves Boston, Massachusetts, and its surrounding suburbs issued $1.1 billion in bonds to finance capital improvements and refund previously issued securities.
The Massachusetts Bay Transportation Authority (MBTA) sold the bonds in two series. The 2024 Series A bonds, consisting of $987.6 million, mature between 2025 and 2052, yielding between 3.07% and 4.07%. The 2024 Series B bonds, consisting of $97.7 million, mature in 2054 and yield 4%.
The securities received a rating of AAA from Fitch Ratings, AAA from Kroll Bond Rating Agency, and AA+ from S&P Global Ratings. The MBTA has designated the Series B bonds as sustainability bonds.
The rating reflects the “strong standalone credit quality of the dedicated portion of the commonwealth’s sales tax allocated to the MBTA,” Fitch analysts wrote.
The MBTA will use about half of the issuance proceeds to fund its capital investment plan, which calls for $9.6 billion in spending through 2029. It will use the other half to refund bonds that it sold in 2009, 2010, and 2014.
The MBTA operates the buses, subway, and commuter rails that make up the Great Boston public transit system.The bonds are special obligations of the authority, secured by a portion of Massachusetts’ sales tax revenue.
Morgan Stanley & Co LLC served as lead underwriter on the issuance. Public Resources Advisory Group, Inc acted as financial advisor.