BOSTON – Massachusetts, taking a cue from the World Bank, is selling $100 million in debt called Green Bonds, saying it’s the first U.S. state to issue such securities to fund environmental projects, Bloomberg News report said.
The tax-exempt general obligations are modeled after ones from the Washington-based development lender, which has sold more than $3 billion in green securities since 2008 to help combat climate change. Endowments and pension funds that are required to invest in environmental ventures may be attracted to the issue, Mass. Treasurer Steven Grossman said. Proceeds of last week’s sale will be used for improving energy efficiency in state buildings, river revitalization and land acquisition, according to bond documents.
“Since we are engaged in a whole series of green projects, why not let people invest directly in those projects and allow people to have a new asset choice,” Grossman said.
The Green Bonds will be part of a $1.1 billion general-obligation issue that also includes $640.3 million for refunding debt. The state has $18.9 billion in general obligations, according to securities documents.
Moody’s Investors Service rates the new issue Aa1, second highest. Debt from Massachusetts borrowers was the worst performer among the 27 states in Standard & Poor’s municipal indexes, losing 0.19 percent through May 30, compared with a return of 0.56 percent for the $3.7 trillion market. •