Mass. To Offer 'Green Bonds'
Massachusetts will be the first state to offer "green bonds" to investors, which will fund environmentally sound infrastructure projects, Treasurer Steven Grossman announced.
"Green bonds are one more reason to invest in Massachusetts," Grossman said in a statement. "Investors already have a healthy appetite for Massachusetts bonds due to our highest-ever bond rating, prudent fiscal management and strong economic outlook. Green bonds will provide an added incentive for institutions and individuals who want to put their money in environmentally beneficial investments."
The bonds, which are part of a $1.1-billion bond sale running Friday through June 4, will be used to finance projects that are part of Gov. Patrick's Accelerated Energy Program (AEP). AEP was announced by Patrick in January 2012 and the goal of it is to reduce energy consumption at more than 700 state sites by 20 to 25 percent, adding thousands of green jobs and saving the state $43 million annually.
Projects in the following four categories will also be funded with green bonds:
• Clean water and drinking water projects;
• Energy efficiency and conservation projects in state buildings;
• Land acquisition, open space protection and environmental remediation projects; and
• River revitalization and habitat restoration projects.
"Green Bonds will allow individuals and institutions the ability to us help strengthen our portfolio and back our policies in financing projects that help reduce our carbon footprint and improve energy efficiency," said Secretary of Administration and Finance Glen Shor.
About $640 million of the bond sale will be used to refinance outstanding bonds to a lower rate, while another $475 million will be used for new-money capital construction, including $100 million of green bonds, according to the treasury office. All of the bonds will be general obligation bonds of the commonwealth and have ratings of AA+, Aa1 and AA+ from Fitch, Moody's and Standard & Poor's, respectively.
State officials expect the green bonds to appeal to a wider range of bidders, increasing competition and lowering borrowing costs for Massachusetts. They said the green bonds could appeal to pension funds and endowments that are required to dedicate part of their holdings to green initiatives.
To learn more about the bond sale, visit www.buymassbonds.com.
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