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MASSACHUSETTS IS TAKING A CUE
FROM THE WORLD BANK.
THE RAPID THE $100 MILLION
AUCTION OF THAT COLD GREEN BOND.
THE FIRST STATE TO ISSUE SUCH
TAX-EXEMPT SECURITIES TO FUND
ENVIRONMENTAL PROJECTS.
STEPHEN GROSSMAN IS THE
MASSACHUSETTS TREASURER
TREASURER AND JOINS US TONIGHT
FROM BOSTON.
DO THE PROCEEDS FROM GREEN
BOND HELP THE ENVIRONMENT?
>> THE COMMONWEALTH OF DOMINICA
RIGHTY OF ENVIRONMENTALLY FOUND
PROJECTS.
THE GOVERNOR LAID OUT AN
ACCELERATED ENERGY PROGRAM.
ABOUT 18 MONTHS AGO.
700 SITES AROUND THE STATE,
SAVING 25% IN TERMS OF ENERGY.
THE GOAL IS TO SAVE THE STATE
MONEY ON AN ANNUAL BASIS.
IF YOU'RE RAISING MONEY, WHY
NOT OFFER GREEN BONDS TO
INVESTORS WHO ARE INCREASING
-- INCREASING AS PART OF
THEIR PORTFOLIOS THAT ARE
SUSTAINABLE AND GREEN MANDATE.
WHY NOT OFFER THEM BONDS TO BE
USED FOR THE PURPOSE OF
INVESTING IN AND ALLOWING THESE
PARTIES TO MOVE FORWARD.
IT'S MATCHING THE INVESTMENT
WITH THE ASSETS IN A WAY THAT
SERVES THE NEEDS OF THE INVESTOR
AND THE COMMONWEALTH. >> IT
SEEMS LIKE A GOOD IDEA.
ALMOST SEEMS LIKE A NO-BRAINER.
WHY DO YOU SUPPOSE IT WAS NOT
DONE EARLIER?
>> THE WORLD BANK DID IT
STARTING IN 2008.
THEY SOLD ABOUT $3 BILLION OF
THESE BONDS.
THERE'S A CLEAR DEFINITION FOR
DIFFERENT TYPES OF PROJECTS YOU
CAN INVEST IN, RAGING FROM
WATER, RIVERS, CLEAN WATER
DRINKING WATER, RETROFITTING
BUILDINGS.
WE THOUGHT IT WAS ENTIRELY
APPROPRIATE TO GO OUT AND TEST
THE MARKETPLACE.
WE SOLD $100 MILLION OF BONDS.
WE HAD ABOUT 182 ORDERS AND 10
INSTITUTIONAL INVESTORS WHO
NEVER BOUGHT BOND BEFORE.
TO BE SOMETHING OF A
LABORATORY OF EXPERIMENTATION
AND INNOVATION.
OFTEN THINGS THAT WE DO HERE
ARE FOLLOWED BY THE STATE.
I SUSPECT OTHER STATES WILL BE
DOING THIS AS WELL IN THE NEAR
FUTURE.
>> DID YOU GET ANY INTEREST FROM
FOLKS WHO BEFOREHAND AND NOT
BEEN INTERESTED IN GETTING
INVOLVED WITH BONDS IN
MASSACHUSETTS.
>> ABSOLUTELY.
WE HAD 183 ORDERS.
INVESTORS,NDIVIDUAL
THE REST FROM INSTITUTIONAL
INVESTORS.
NO DOUBT THERE ARE INVESTORS WHO
HAVE A GREEN OR SUSTAINABLE
MANDATE IN THEIR REQUIREMENTS
INHEHEIR PORTFOLIO LOOKING FOR
PRODUCT.
THEY FOUND THIS PRODUCT.
WE ARE GOING TO FULLY DISCLOSE
EXACTLY HOW WE INVEST THE MONEY.
IT WILL BE ON OUR MASS
BONDHOLDER WEBSITES ON THE
REGULAR BASIS SO INVESTORS CAN
UNDERSTAND WE ARE USING THE
MONEY FOR THE PURPOSES THEY ARE
INTENDED.
>> I'M SPEAKING WITH STEPHEN,
THE MASSACHUSETTS STATE
TREASURER.
HOW DOES THE YIELD ON THE GREEN
BOX COMPARED TO BONDS AND OTHER
ACIDS LANCES -- OTHER ASSET
CLASSES?
ARE BONDS ARE RATED AA PLUS
YOUR BEHALF THE HIGHEST BOND
RATING THE STATE HAS EVER HAD
HAD. HAS EVER
EVEN A VERY TOUGH MARKET, THE
LAST FIVE OR SIX DAYS FOR
INVESTORS WHO KNOW THE BUSINESS
WELL, THEY HAVE SEEN THE
MARKETS UNSTABLE.
BUT WE WERE ABLE TO SELL THE
BONDS, OVERSUBSCRIBED.
I THINK YOU'LL SEE MASSACHUSETTS
SELL THEM IN THE NEXT FEW YEARS.
THE NEXT FISCAL YEAR, I THINK
WE WILL DO MORE GREEN BOND
REQUEST TO SPEAK ABOUT THE
ENVIRONMENT.
THE DALLAS FED PRESIDENT SAYS HE
OLD AND END TO TWO DECADE
MARKET IN BONDS.
HE EXPRESSED CONCERN ABOUT THE
VOLATILITY IN THE BON MOT PART
-- IN THE BOND MARKET.
HOW MUCH THAT AFFECT GREEN BOND
SALES GOING FORWARD?
>> I THINK IT WILL GO WAY OTHER
BONDS LOGO.
WE ARE SELLING $1.1 MILLION A
BOND.
THE REST OF THE BOND OFFERING
WILL GO ON A DAY-TO-DAY BASIS.
IT IS AN UNSTABLE ENVIRONMENT
SIMILAR TO WHAT WE HAD LAST
DECEMBER TO BE WARRANTED HIS
PATCHES FROM TIME TO TIME.
LAST DECEMBER.
WE RUN INTO THESE PATCHES FROM
TIME TO TIME.
IN THAT SENSE IF YOU'RE LOOKING
FOR NEW PRODUCT TO LEGITIMATELY
FUND ENVIRONMENTALLY SOUND
PROJECTS, IT IS A WIN FOR THE
STATE AND THE INVESTORS AND
COMMONWEALTH.
IT IS A WINDOW ACROSS THE BOARD.
I'M VERY PLEASED WITH HOW THE
DEAL WENT.
I LIVE FORWARD TO DOING IT
AGAIN IN THE FUTURE.
--DEBTOR MUST USE ITS POWERS
BAR FROM MASSACHUSETTS
WARS LOST NEARLY A FIFTH OF A
PERCENT THROUGH MAY 30.
THAT COMPARES WITH THE RETURN OF
$3.7A PERCENT FOR THE
TRILLION MARKET.
HOW CAN THE STATE TURN THINGS
AROUND?
WHAT I THINK THAT IS A TEMPORARY
PHENOMENON.
THE LAST FEW DEALS WE HAVE DONE
HAVE TRADED THROUGH AA PLUS AT
AAA RATES.
WE HAVE BEEN VERY WELL TREATED
BY THE MARKET PLACE OVER THE
MASS -- OVER THE PAST FEW YEARS.
OVERE RUNNING $510 MILLION
BENCHMARK IN TERMS OF OUR
BUDGET.
I THINK WE WILL HAVE AN
.NCREASE IN OUR RAINY DAY FUND
WE WILL END THE YEAR WELL OVER
$1 BILLION.
.'M NOT CONCERNED ABOUT
REVENUES ARE COMING IN.
WE CREATED 105,000 JOBS IN THE
LAST 27 MONTH IT MASSACHUSETTS
IS PERFORMING IN A SOLID WAY.
IT'S JUST A TEMPORARY
PHENOMENON.
I WOULD NOT PAY ANY ATTENTION TO
THE MOMENTARY WIGGLES THROUGH
THE STATE TO SECURE AND THE
COMMONWEALTH IS DOING WELL.
THE INVESTORS HAVE TREATED OUR
BONDS EXTRAORDINARILY WELL IN
THE MARKETPLACE DURING THE PAST
FEW YEARS.
>> STEPHEN GROSSMAN, THE
MASSACHUSETTS STATE TREASURER
JOINING US TONIGHT.
PEGGY SO MUCH FOR YOUR TIME