Massachusetts to issue AA+ $100m Green Bond on 4 June

Reuters reports that the US State of Massachusetts will issue $100 million of Green General Obligation Bonds, as part of a $1.115 billion parcel of bonds to be issued on 4 June 2013.

For credit purposes the bonds are standard Massachusetts State Government Bonds. The difference is that the State is guaranteeing to use the proceeds to finance “environmentally beneficial” projects.

It's a similar approach to the World Bank Green Bonds, except there has been no third party review of the inclusion criteria - and the proceeds are not all for investments related to addressing climate change, so it wouldn't win Climate Bond certification.

The projects are in designed in four categories:

  • Clean Water and Drinking Water Projects.
  • Energy Efficiency and Conservation Projects in State Buildings.
  • Land Acquisition, Open Space Protection and Environmental Remediation Projects.
  • River Revitalization and Preservation and Habitat Restoration Projects.

Rating is AA+ Fitch / Aa1 Moody’s. Lead manager is Bank of America Merrill Lynch. Full details are available on the Massachusetts Investor web site.


“Green Bonds represents an innovative approach to financing projects that increase our energy efficiency, lower our Greenhouse Gas emissions and protect open space for future generations,” said George Bachrach, President of the Environmental League of Massachusetts. “The state will lead by example, retrofitting state buildings to save energy, investing in infrastructure to preserve our water supply, and purchasing open space that would otherwise be lost.