A First Boston Corp. syndicate will price between $550 million and $660 million of Massachusetts general obligation bonds next Monday, sources said yesterday.
The news came with speculation that rating agencies might view the state's fiscal progress favorably. The state managed to end the last fiscal year with a slight budget surplus, after staring down a deficit of $850 million.
Because of that accomplishment, Massachusetts now has better fiscal prospects than some states with better ratings, such as neighboring Connecticut. "Either the other guys have got to get downgraded or Massachusetts has got to be upgraded," said one banker familiar with the bond deal.
At present, Massachusetts has a rating of BBB from Standard & Poor's Corp. and Baa from Moody's Investors Service. Connecticut is rated AA and Aa, respectively.
Representatives of Standard & Poor's met with state officials last week, a source said. Analysts from Moody's and Fitch Investors Service are expected to meet with the state officials this week.
The coming deal will help the state balance its budget by raising $260 million for this year's payments on other outstanding debt.
The offering will comprise serial bonds maturing from 1996 to 2001; capital appreciation bonds coming due from 2001 to 2006; and term bonds maturing in 2006, 2010, and 2012.
Officials from the Massachusetts treasury are expected to meet with retail brokers Thursday and with institutional buyers at various times.
