Fitch to Downgrade S-T Rtg to 'F1' on $75.590MM Mass GO Infra Loan Act of 2000 VRDBs Ser B

NEW YORK--(BUSINESS WIRE)-- On the effective date of April 24, 2015, Fitch Ratings will downgrade the short-term rating to 'F1' from 'F1+' assigned to the $75,590,000 The Commonwealth of Massachusetts general obligation bonds, Central Artery/Ted Williams Tunnel Infrastructure Loan Act of 2000 (variable rate demand bonds) series B (the bonds).

The short-term rating action is in connection with: (i) the substitution of the liquidity support provided by U.S. Bank, National Association, rated 'AA-/F1+', Stable Outlook in the form of a Standby Bond Purchase Agreement (SBPA), with a substitute SBPA to be issued by Bank of America, N.A, (BANA, rated 'A/F1', Negative Outlook); and (ii) the mandatory tender of the bonds, which will occur on April 24, 2015.

KEY RATING DRIVERS:

On the effective date, the short-term 'F1' rating will be based on the liquidity support provided by BANA, in the form of a substitute SBPA. The long-term 'AA+', Stable Outlook rating assigned to the bonds continues to be based on the rating that Fitch assigns to the Commonwealth of Massachusetts GO bonds. For information on the long-term rating, see the rating action commentary, dated April 16, 2015, available on Fitch's website at www.fitchratings.com.

The substitute SBPA provides for the payment of the principal component of purchase price plus an amount equal to 34 days of interest calculated at a maximum rate of 12%, based on a year of 365 days for tendered bonds during the weekly and daily rate modes, in the event that the proceeds of a remarketing of the bonds are insufficient to pay the purchase price following an optional or mandatory tender. The substitute SBPA will expire on April 24, 2018, the stated expiration date of the SBPA, unless such date is extended; upon conversion to any mode other than daily or weekly; or upon the occurrence of certain events of default which result in a mandatory tender or other events of default related to the credit of the bonds which result in an automatic and immediate termination. The short-term 'F1' rating will expire on the expiration or prior termination of the SBPA. A mandatory tender of the bonds is scheduled to occur on April 24, 2015, the SBPA substitution date. The remarketing agent for the bonds is Bank of America Merrill Lynch.

RATING SENSITIVITIES:

The short-term rating reflects the short-term rating that Fitch maintains on the bank providing liquidity support, and will be adjusted upward or downward in conjunction with the short-term rating of the bank and, in some cases, the long-term rating of the bonds. The long-term rating is exclusively tied to the creditworthiness of the bonds and will reflect all changes to that rating.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'U.S. Municipal Structured Finance Criteria', February 23, 2015;

--'Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support', January 22, 2015.

Applicable Criteria and Related Research:

Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=856189

U.S. Municipal Structured Finance Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=862222

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Fitch Ratings
Primary Analyst
Linda Friedman
Senior Director
+1 212-908-0727
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Richard Park
Director
+1 212-908-0289
or
Committee Chairperson
Mario Civico
Senior Director
+1 212-908-0796
or
Media Relations:
Elizabeth Fogerty, +1 212-908-0526
[email protected]

Source: Fitch Ratings

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