OREANDA-NEWS. Fitch Ratings has assigned an 'AA+' long-term rating on bank notes associated with the following:

--$200 million Commonwealth of Massachusetts tax exempt commercial paper (CP) notes, series L.

The rating has been assigned in conjunction with the provision of a liquidity agreement between the Commonwealth and State Street Bank and Trust Company. The CP notes are general obligations of the Commonwealth.

Based on a review of the terms governing the bank notes, it is Fitch's opinion that the incremental risk associated with the bank notes does not have a material impact on the long-term credit rating of the Commonwealth of Massachusetts.

The Rating Outlook is Stable.

SECURITY

The CP notes are general obligations of the Commonwealth, to which its full faith and credit are pledged.

KEY RATING DRIVERS

STRONG AND WEALTHY ECONOMY: Massachusetts has a broad and diverse economy with the second-highest per capita personal income in the nation. Employment growth is solid, education levels are high, and population growth has approximated that of the U.S. this decade, a marked improvement from historical experience and the performance of other states in the region.

PRUDENT FINANCIAL MANAGEMENT: The Commonwealth has benefited from conservative budgeting and sound financial practices over time. A limitation on the use of capital gains-related tax revenue has reduced the volatility of economically sensitive revenues in the budget, and the Commonwealth has shown a commitment to reserve funding.

COMPARATIVELY HIGH DIRECT LIABILITY BURDEN: Massachusetts' liability levels are high for a U.S. state government, and Fitch expects them to remain so. This is partially explained by the above-average role played by the Commonwealth in relation to local levels of government when compared to most other states. In addition, the Commonwealth is responsible for the pension benefits of not only Commonwealth employees but also teachers statewide, contributing to a combined burden of debt and pensions that is also well above the median for U.S. states.

RATING SENSITIVITIES

The rating is sensitive to shifts in fundamental credit characteristics including the Commonwealth of Massachusetts' commitment to strong financial management practices.