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MASSACHUSETTS $240 MILLION GENERAL OBLIGATION NOTES RATED 'F-1' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Nov. 12 /PRNewswire/ -- Massachusetts' $240 million general obligation notes, 1993 series B, are rated "F-1" by Fitch. The notes, offered competitively Nov. 16, will be dated Nov. 23, 1993, and mature Nov. 22, 1994. At bidders' option, this issue may be comprised of all fixed-rate notes, or $120 million fixed rate and $120 million variable rate; if the variable-rate option is selected, bidder must also provide a prequalified swap agreement to assure the commonwealth a net fixed interest rate.
 The notes are being issued to reimburse the Commonwealth of Massachusetts for advances made to the Massachusetts Bay Transportation Authority (MBTA) to fund the 1993 calendar year's net cost of service, or operating deficit. The commonwealth is obligated by statute to provide the MBTA sufficient funds to meet its operating payments, up to the level of the year's estimated net cost of service. In the following year, the MBTA requisitions the commonwealth for reimbursement of the balance of the certified net cost of service, which is then permanently funded by the commonwealth in its succeeding year's budget (e.g., the 1993 net cost of service will be included in the commonwealth's 1994-95 budget). Although the commonwealth also receives the service assessments levied by formula against the participants, security for the notes is the general obligation pledge of the commonwealth, independent of receipt of the assessable net cost of service.
 The "F-1" rating assigned to the commonwealth's general obligation notes reflects the stabilized and improved cash flows, reduced amount and shortened term of operating borrowings, and emergence from the recession's severity. Massachusetts' substantially improved financial position is evident not only in the rebuilding of reserves to 2.7 percent of 1992-93 revenues, but also by its strengthened liquidity position. The year-end cash position is projected at $748 million compared with maximum projected operating borrowings of $210 million. Tax collections continue to exceed benchmark estimates.
 -0- 11/12/93
 /CONTACT: Ruth Corson Maynard, 212-908-0596, or Claire G. Cohen, 212-908-0552, both of Fitch/


CO: ST: Massachusetts IN: SU: RTG

TW -- NY032 -- 3586 11/12/93 10:16 EST
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Publication:PR Newswire
Date:Nov 12, 1993
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