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MASSACHUSETTS $350 MILLION GO & SPECIAL OBLIGATION REVENUE BONDS RATED 'A' BY FITCH -- FITCH FINANCIAL WIRE --

 MASSACHUSETTS $350 MILLION GO & SPECIAL OBLIGATION REVENUE BONDS
 RATED 'A' BY FITCH -- FITCH FINANCIAL WIRE --
 NEW YORK, May 29 /PRNewswire/ -- The Commonwealth of Massachusetts's $250 million General Obligation Bonds, 1992 Series A and 1992 Series B are rated 'A' by Fitch. Fitch also assigns an 'A' rating to the simultaneously offered but separately secured $100 million Special Obligation Revenue Highway Improvement Loan Act of 1991 Bonds, 1992 Series A, the initial offering of such bonds. The bonds are expected on or about June 8 through negotiation with a syndicate led by Merrill Lynch & Co. and Smith Barney, Harris Upham & Co., Inc. The credit trend is stable.
 The general obligation bonds are secured by a pledge of the commonwealth's full faith and credit, while the special obligation revenue bonds are not general obligations of the commonwealth but are secured under the terms of a trust agreement, payable from a pledge of $.02 per gallon of the $.10 increase in the gas tax enacted in 1990. However, legal provisions are strong. Pledged revenues are deposited monthly with a trustee into the infrastructure fund sub-account of the commonwealth's highway fund, revenues which are constitutionally pledged to transportation purposes. Debt service represents a first lien on the pledged revenues, with excess funds unable to be used for any transportation purposes until sufficient debt service appropriation is made. Pledged funds also may be enlarged by the commonwealth under supplemental trust agreements (applicable to all outstanding special obligation bonds) to include other transportation-derived revenues, as well as additional gas tax revenues, affording flexibility. The commonwealth has covenanted not to reduce the gas tax below the pledged $.02 level, and is currently at $.21. The additional bonds' test is strong. Despite continued softening in gas tax collections, projected maximum debt service is covered 5.0x by estimated 1991-92 pledged revenues.
 Overall, the commonwealth continues to evidence financial improvement, with tax collections through April above estimates and 6 percent above the same period last year. While an operating deficit is expected for 1991-92, a fund balance of approximately $131 million is projected. The cash position is also improved, with operating borrowing substantially below earlier levels. The budget for 1992-93 is under legislative consideration, with recommendations based on conservative revenue assumptions. The recession appears to be abating with employment showing small recent gain. Massachusetts retained its rank of third in per capita personal income in 1991, with its 1.5 percent annual growth leading the New England states and only slightly lagging the 2.1 percent national gain.
 -0- 5/29/92
 /CONTACT: Claire G. Cohen, 212-908-0552, or Ruth Corson Maynard, 212-908-0596, both of Fitch/ CO: ST: Massachusetts IN: SU: RTG


KD -- NY072 -- 5342 05/29/92 16:59 EDT
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Publication:PR Newswire
Date:May 29, 1992
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