Replay Information Please note that the investor broadcast associated with the following slides is available. The presentation can be accessed by following the link below : https://roadshow.munios.com/roadshow-viewer.aspx?e=3USA1 The full slide deck for this call is found in the pages below. These slides as well as those of prior investor calls may also be accessed by visiting the Investor and Rating Agency Presentation Archive on the Commonwealth’s investor website at: www.massbondholder.com 2
The Commonwealth of Massachusetts Commonwealth Transportation Fund Revenue Bonds Federal Highway Grant Anticipation Notes INVESTOR PRESENTATION $200,000,000* Commonwealth Transportation Fund Revenue Bonds (Rail Enhancement & Accelerated Bridge Programs), 2019 Series A $53,500,000* Federal Highway Grant Anticipation Notes (Accelerated Bridge Program), 2019 Series A * Preliminary, subject to change
Disclaimer This presentation has been prepared by the Commonwealth of Massachusetts, as of November 4, 2019, to provide summary information relative to the proposed offering of the Commonwealth of Massachusetts, $200,000,000* Commonwealth Transportation Fund Revenue Bonds 2019 Series A and $53,500,000* Federal Highway Grant Anticipation Notes 2019 Series A. The information contained in this investor presentation speaks only as of the date such information was prepared and has not been updated since that date. Accordingly, such information may not address all factors which may be material to an investor and may contain omissions of fact or statements that are not accurate because of the passage of time or changes in facts or circumstances subsequent to the date of such information. The Commonwealth is under no obligation to update any of the information set forth in this investor presentation. The presentation is incomplete and investment decisions relating to the Commonwealth Transportation Fund Revenue Bonds and the Federal Highway Grant Anticipation Notes should be based only upon the Official Statements of the Commonwealth relating to such securities. The provision of access to this presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities described or mentioned in the presentation. The information contained herein does not constitute a sufficient basis for making a decision with respect to the purchase or sale of any security and is not intended to constitute investment advice of any kind. Commonwealth securities are sold only by means of an Official Statement and through registered broker-dealers. The information set forth herein includes information obtained from non-Commonwealth sources that are believed to be reliable, but such information is not guaranteed as to accuracy or completeness and is not to be construed as a representation by the Commonwealth as Issuer of the securities, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC as Representatives of the Underwriters, or PFM Financial Advisors LLC as Financial Advisor. All information and expressions of opinion herein are subject to change without notice. The Commonwealth undertakes no obligation to provide any additional information or to update any of the information or the conclusions contained herein. This presentation contains certain forward-looking statements that are subject to a variety of risks and uncertainties that could cause actual results to differ from the projected results, including without limitation general economic and business conditions, conditions in the financial markets, the financial condition of the Commonwealth and various state agencies and authorities, receipt of federal subsidies, litigation, arbitration, force majeure events and various other factors that are beyond the control of the Commonwealth and its various agencies and authorities. Because of the inability to predict all factors that may affect future decisions, actions, events or financial circumstances, what actually happens may be different from what is set forth in such forward-looking statements. Forward-looking statements are indicated by use of such words as “may,” “will,” “should,” “intends,” “expects,” “believes,” “anticipates,” “estimates” and others. By viewing this investor presentation, you acknowledge that you understand and agree to the provisions of this page. *Preliminary, subject to change 2
Transaction Summary – CTF Bonds Commonwealth Transportation Fund Revenue Bonds Series: 2019 Series A 2019 Series A – Preliminary Amortization by Maturity Year Principal Amount: $200,000,000* 2049 Term Bond Interest Payment Dates: June 1 and December 1, beginning $200,000,000 June 1, 2020 Final Maturity Date: Due June 1, 2049 Security: Commonwealth Transportation Fund. Primary revenue sources: Motor Fuels Tax and Registry Fees Use of Proceeds: Fund costs of certain significant rail improvement projects outside the MBTA’s regular capital program (Rail Enhancement Program) and may also be used to fund additional capital project costs under the Accelerated Bridge Program Current Ratings on Parity Debt: Aa1/AA+/AAA (Moody’s/S&P/Kroll) Optional Redemption: TBD * Preliminary, subject to change 3
Transaction Summary - GANs Federal Highway Grant Anticipation Notes, 2019 Series A Principal Amount: $53,500,000* 2019 Series A – Preliminary Amortization by Maturity Year Interest Payment Dates: June 15 and December 15, beginning June 15, 2020 Due (06/15) Amount Final Maturity Date: Due June 15, 2027 2026 $23,500,000 Security: Federal Highway Reimbursements and net amount credited 2027 30,000,000 to the Commonwealth Transportation Fund Use of Proceeds: Proceeds from the 2019A Notes will be used to fund additional capital project costs of the Accelerated Bridge Program Current Ratings on Parity Debt: Aa2/ AAA (Moody’s/S&P) Optional Redemption: Each maturity will be subject to redemption on any date on and after the June 15 immediately preceding the applicable maturity date at the option of the Commonwealth and as determined at pricing * Preliminary, subject to change 4
Key Credit Strengths: Commonwealth Transportation Fund Key CTF Credit Points • Pledged revenues include fuel and non-fuel sources with Motor Fuels Tax and Registry Fees Diverse and Stable • Revenue collections are strong with diversity in timing State-wide Revenue • Low degree of correlation among pledged revenue streams limits volatility Stream • Statewide taxes and fees, on large and diverse regional economy • Broad and diverse economy that encompasses over 6.9 million residents Strong and Diverse • Per capita personal income levels in excess of 130% of the national average in 2018 Economic Base • Presence of multiple major universities and both stable and growing industries • Strong debt service coverage of approximately 7.1x* based on actual preliminary FY2019 CTF revenues of $1.4 billion • Pro forma debt service coverage, including expected future issuances, estimated at 5.1x* Debt Service • Conservative 4x ABT further supports liquidity and a healthy overall leverage position Coverage and Liquidity • Strong debt service set asides (1/10 th principal and 1/5 th interest) • NO Pledged Funds may be applied to “any other use” until appropriation has been made sufficient to pay principal and interest • Massachusetts Constitution requires all revenue from vehicle, fuel and motor vehicle license and registration fees be used Legal Protections Revenue Pledge for transportation purposes only • Trust Agreement does not allow the Commonwealth to change the rate of the Registry Fees or the Motor Fuels Tax unless Net Pledged Revenues exceed 4.0x MADS coverage after the changes * Preliminary, subject to change 5
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