UPDATE 1-Massachusetts to sell $1.1 bln new and refunding GOs
May 21 (Reuters) - Massachusetts will sell $1.1 billion of new and refunding general obligation bonds on June 4, according to the state's website.
On Tuesday, Moody's Investors Service assigned an Aa1 rating and stable outlook to the bonds, while Fitch Ratings assigned an AA-plus rating and stable outlook.
The credit rating agencies noted that the state has high levels of wealth. Personal income per capita is 128 percent of the U.S. average, the second highest of all states, according to Fitch.
Massachusetts also has strong financial management practices, including "a willingness to promptly identify and close budget gaps," Moody's said.
But the commonwealth also has one of the highest debt levels in the country. Its net tax-supported debt is 10 percent of personal income, attributable in part to the state's "above-average role" in its local governments, Fitch said.
Massachusetts has at least $18.4 billion of GO debt outstanding, the rating agencies said.
Eaton Vance Investment Managers, which has several Massachusetts muni bond funds, said the state has managed its budget well through the difficult years following the economic recession.
"They're very proactive in managing their budget, building reserve funds," said Craig Brandon, an Eaton Vance portfolio manager.
"They've made hard decisions," he said. "The state seems to have been able to pull off that balance of cutting spending and raising taxes."
The deal consists of $375 million of GO bonds, $100 million GO "Green Bonds," and $640 million of GO refunding bonds, according to the state's website.
Bank of America Merrill Lynch is the lead manager on the sale.