#1The Commonwealth of Massachusetts TENSIS 407 SIGILLUM REPUBLICE The Commonwealth of Massachusetts Investor Presentation: General Obligation Bonds Consolidated Loan of 2020, Series E General Obligation Refunding Bonds 2020, Series D General Obligation Refunding Bonds 2020, Series E (Federally Taxable) Office of the State Treasurer Deborah B. Goldberg#22 TENSIS Disclaimer This presentation has been prepared by The Commonwealth of Massachusetts, as of November 10, 2020, to provide summary information relative to the proposed offering of The Commonwealth of Massachusetts General Obligation Bonds Consolidated Loan of 2020, Series E, General Obligation Refunding Bonds 2020, Series D, and General Obligation Refunding Bonds 2020, Series E (Federally Taxable). The presentation is incomplete. 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 presentation is not part of the Commonwealth's Information Statement (Information Statement) and is qualified in all respects by reference to the most recently updated Information Statement that has been filed with the Municipal Securities Rulemaking Board through its Electronic Municipal Market Access (EMMA) system. The Commonwealth is under no obligation to update any of the information set forth in this investor presentation. Investment decisions relating to Commonwealth general obligation bonds and notes should be based only upon the most recently updated Information Statement and the Official Statement of the Commonwealth relating to such bonds or notes. The provision of access to this presentation does not constitute an offer to sell or the solicitation of an offer to buy any bonds or notes that may be described or mentioned in the presentation. Commonwealth bonds and notes 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 Bonds, Morgan Stanley & Co. LLC as Representative of the Underwriters, nor 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 or to correct any inaccuracies that may become apparent. 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 grants, 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 other similar words.#3Financing Overview and Additional Information TENSIS Issue* Tax Status $500,000,000* General Obligation Bonds Consolidated Loan of 2020, Series E Tax-Exempt $417,655,000* General Obligation Refunding Bonds, 2020 Series D Tax-Exempt Use of Net Proceeds New Money Refunding $444,090,000* General Obligation Refunding Bonds, 2020 Series E (Federally Taxable) Federal: Taxable Commonwealth: Tax-Exempt Refunding Amortization* 2022-2050 2034-2042 2022-2034 Ratings (Moody's/S&P/Fitch) Timing* Closing* Aa1 (Stable) / AA (Stable) / AA+ (Stable) Taxable Indications of Interest and Tax-Exempt Retail Order Period: November 18, 2020 Taxable Launch and Tax-Exempt Pricing: November 19, 2020 December 3, 2020 Preliminary Official Statement Detailed Update on the Commonwealth Additional Information https://emma.msrb.org/P21412468-P21097677-P21506815.pdf For a more detailed update on the Commonwealth, please view the Commonwealth's November 13th Investor Call Replay available via the following link: http://roadshow.munios.com/rs/7VQ9B www.massbondholder.com * Preliminary, subject to change 3#4Credit Factors TENSIS Economy Finances & Liquidity Governance Debt and Pensions . • • . • Large economy focused on important knowledge sectors that pay above average wages such as health care, technology and education Deep and diverse economy that was strong going into the recession with low 2.9% average unemployment. The pandemic affected the state's economy, and the State had the nation's highest unemployment rate in June of 17.7% - preliminary unemployment in September was 9.6% High income levels with per capita income at 132% of the nation in 2019, 2nd highest among states (1) Massachusetts' individual income taxes and sales taxes accounted for over 80% of total tax revenue in 2020. The State is still finalizing its fiscal 2021 budget. Through October, fiscal 2021 tax revenue is up 1.3% year-over-year with growth in both income and sales taxes Strong budget stabilization fund balance at $3.5 billion (preliminary and unaudited as of June 30, 2020) or 7.3% of 2019 expenditures. May draw on stabilization fund in fiscal 2021, but even with any draw, balance will remain healthy The Commonwealth plans to issue $1.2 billion in Revenue Anticipation Notes this fiscal year. The State also has a $200 million commercial paper program, $200 million note purchase agreement and a $1.75 billion line of credit opened on May 11, 2020 Strong financial, debt and budget management policies including: (i) consensus revenue estimating; (ii) multiyear financial plans/forecast; (iii) annualized formal debt affordability statements and (iv) multiyear capital investment planning - Strong budget gap closing capacity – the Governor has authority to cut expenses for executive agencies without legislative authority if there is a revenue shortfall Massachusetts' strong governance framework will remain a key credit factor as the state navigates future uncertainty There is an annual administrative limit on the amount of bond-funded capital expenditures, or "bond-cap" to keep the Commonwealth's debt within affordable levels (FY21-FY25 plan is $2.46 billion) Debt is elevated compared to other states in part because of the Commonwealth's practice of financing projects for local governments(1) As of the last valuation date January 1, 2019, the funded ratio of the pension system based on the actuarial value was 56.3% Source: November 2020 Credit Rating Reports - See massbondholder.com 4 (1) Refer to Appendix#5The Commonwealth has a Highly Educated Workforce with High Incomes and is Home to Top Companies, Colleges, and Universities ■ ☐ Large diverse economy focused on important knowledge sectors that pay above average wages such as health care, technology and education As of July 1, 2019, the population of the Commonwealth was 6.9 million ➤ The Commonwealth's population has grown 5.8% from 2009 to 2019 compared to the national average of 7.0% and the New England average of 3.1% The availability of a skilled and well-educated workforce is an important resource The Commonwealth has the highest percentage of adults with a bachelor degree or higher among all the states in the nation at 44.5% 91.8% of adults over the age of 25 have completed high school, above the national average of 88.3% Massachusetts has spent nearly one-third more per pupil in primary and secondary education than the national average since 1994 TENSIS Home to 34 Fortune 500 Companies GE EVERSOURCE Biogen Boston Scientific STATE STREET. Raytheon Liberty Mutual. Home to 114 Colleges and Universities HARVARD TS NORTH ASTERN UNIVERSITY BOSTON UNIVERSITY Northeastern University MASS Massachusetts Institute of Technology 5 Source: The Commonwealth Information Statement dated October 28, 2020 (1) Refer to Appendix#6TENSIS Municipality Credits in Massachusetts Massachusetts has more AAA rated local governments than any other state S&P MA Municipality Ratings (1,2) 6 2% 1% 7% 0% ■ AAA, 32.4% ■ AA+, 36.5% 32% ■ AA, 20.5% 21% 37% ■ AA-, 6.8% A+, 1.8% A, 1.4% ■A-, 0.5% (1) There are 351 Towns and Cities in Massachusetts (2) These ratings are the opinion of S&P Global as of 2019 89% of S&P's 222 municipality ratings are AA to AAA Source: S&P Global, 2019 Distribution Of 'AAA' U.S. Municipalities Ratings As of Jan. 2, 2020 TX MA ≥ 2 = 2 5 X 8 1 g Other 0 20 20 40 60 80 100 120 140 Total=426 Copyright 2020 by Standard & Poor's Financial Services LLC. All rights reserved.#77 The Commonwealth Primarily Leverages Its GO Program TENSIS Program Revenue Pledged Description Outstanding Par Ratings* (9/30/2020) Largest and most active debt Aa1 General Obligation (GO) Bonds Full Faith & Credit program. Funds the Commonwealth's AA $24.1 billion AA+ Capital Investment Plan NR Commonwealth Transportation Fund (CTF) Bonds Primarily Motor Fuels (e.g., 24¢ Gas Tax) Registry Fees Funds the Rail Enhancement Program and Accelerated Bridge Program Aa1 $2.9 billion AA+ NR AAA Federal Highway Grant Anticipation Notes (GANs) Special Obligation Bonds (Convention Center) Federal Highway Reimbursements, also backed by CTF, subject to a prior lien for Senior Obligations Hotel occupancy tax receipts, vehicle rental surcharge fees and a portion of sales tax receipts Funds a portion of the Accelerated Bridge Program and prior transportation projects Aa2 AAA $662 million NR NR A1 Used to finance Boston's convention center A $504.3 million NR NR Source: The Commonwealth Information Statement dated October 28, 2020 * Moody's, S&P, Fitch, Kroll#88 $1.50 17% GO Debt Amortization is Conservative and Front Loaded (1) GO Debt by Tax Status(1 GO Variable Rate Debt: $1.7BN (7.2%) (2,3) LIBOR Bonds $507 million ■■Tax-Exempt ($20.0 billion) 23% 30% ■■Direct Purchases $469 million 2% VRDBS $275 million ■Taxable ($4.1 billion) 83% 17% ■ CPI Bonds $38 million 28% Multi-Modal $377 million (1) As of September 30, 2020 (2) $0.8 billion are synthetically fixed through interest rate swap agreements and $0.9 billion are unhedged variable rate bonds (3) As of September 30, 2020 The Commonwealth's GO Debt Service Profile ($Billion by Fiscal Year as of September 30, 2020) $2.50 26% of principal amortizes in 5 years $2.00 48% of principal amortizes in 10 years GO Debt Profile Key Statistics Maximum Annual Average Annual Debt Service Weighted Average Life of Debt Debt Service $2.16 billion $1.22 billion 11.6 Years $1.00 $0.50 $0.00 2021 2022 2023 2024 2025 2026 2027 Source: The Commonwealth Information Statement dated October 28, 2020 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 TENSIS#99 What You Invest in When Investing in Massachusetts Bonds FY21 CIP Themes Supporting Communities Customer Orientation Asset Stewardship TENSIS Climate Resiliency Economic Opportunity ☐ The Capital Investment Plan (CIP) supports capital investments in every region of the Commonwealth and across all areas of government The CIP provides long-term investments in transportation, state- owned facilities, health and human services, public safety, and information technology The CIP also includes significant funding to promote economic development, enhance workforce skills, expand affordable housing opportunities, care for critical environmental infrastructure, and support the Commonwealth's cities and towns The CIP leverages outside resources, collaborates across agencies and builds effective partnerships FY21 CIP1 Bond Cap $2.458 Billion Transportation Housing & Economic Development Community Investment 5% 6% 7% 35% State Owned Facilities Value Optimization 14% 15% 18% Energy & Environment Higher Education Information Technology 1 For more detail on the Capital Plan https://budget.digital.mass.gov/capital/fy21/downloads/#10TENSIS What You Invest in When Investing in Massachusetts Bonds Transportation Maintain and improve the condition of Massachusetts' roads and bridges Improve reliability and modernization of MBTA subways, buses and commuter rail transit system Make the public transit system safer, more accessible and able to accommodate growth Housing and Economic Development Provides municipalities with funding for projects promoting economic development through the MassWorks program Investment in local housing authorities across 234 communities funding preservation and redevelopment of units that benefit approximately 80,000 low-income people, of whom about 70% are elderly, disabled or have other special needs Develop affordable housing for the Commonwealth's workforce, seniors and veterans Provide grants to foster job growth and innovation in the life sciences industry Broadband Last Mile Infrastructure program which is successfully closing the broadband connectivity gap in western Massachusetts MASSACH Sunderland Bridge; Source: https://en.wikipedia.org/wiki/Sunderland_Bridge_(Massachusetts) CALEWIFE MBTA Subway Red Line; Source: https://www.railtech.com/infrastructure/2019/03/06/alstom- to-modernise-signalling-system-in-boston-metro/?gdpr=accept 10#1111 TENSIS What You Invest in When Investing in Massachusetts Bonds State Owned Facilities ■ ■ ■ Renovations and replacements to modernize and improve operations at 100 active court facilities across the Commonwealth, including energy efficiency and climate resiliency Renovations and modernization to some of the Commonwealth's most vulnerable residents in facilities comprising more that 250 Commonwealth-owned buildings, including group homes, mental health hospitals, centers for individuals with developmental disabilities, and a public health laboratory Construction of a new state-of-the-art long-term facility for veterans at the Soldiers' Home Environmental Infrastructure Investments to support climate change mitigation and adaptation programs, including municipal vulnerability preparedness grants, critical coastal infrastructure and resilience grants and dam and seawall funding Deferred maintenance of 450,000 acres of parks and forests, beaches, bike trails and other state-owned recreational assets Assist cities and towns in preserving their natural resources, including water quality, parks and open space, land use planning and funding for solid waste management and recycling Halibut Point State Park; Source: https://blog.mass.gov/blog/tourism/celebrate- national-park-and-recreation-month-at-dcr-parks-in-massachusetts/#12TENSIS What You Invest in When Investing in Massachusetts Bonds Community Investment Partnering with cities and towns to provide grants to support important local infrastructure including roads and bridges, parks, economic initiatives and environmental improvements Higher Education ■ Invest in the nation's leading education system throughout the Commonwealth Continued capital investments supporting students, workforce demands and campus priorities within the public higher education system which includes 15 community colleges, 9 state universities, and 5 UMass campuses Information Technology Improve the ability to deliver government services while working remotely, modernizing and securing the Commonwealth's digital network and shifting critical business applications to cloud-based platforms Expand cybersecurity capabilities and institute event monitoring and communication processes to secure access to business systems and data 12 12 UMass Amherst; Source: https://www.umass.edu/gateway/campus-gallery#1313 TENSIS Maturity (11/01)* Par Amount* Maturity (11/01)* 2022 $20,000,000 2034 Preliminary Amortization $500,000,000* General Obligation Bonds Consolidated Loan of 2020 Series E $417,655,000* General Obligation Refunding Bonds 2020 Series D $444,090,000* General Obligation Refunding Bonds 2020 Series E (Federally Taxable) Par Amount* $75,760,000 Par Amount* Maturity (11/01)* $34,460,000 2022 2025 25,000,000 2035 45,555,000 2023 6,850,000 2026 25,000,000 2036 46,550,000 2024 6,885,000 2027 25,000,000 2037 47,215,000 2025 48,470,000 2028 25,000,000 2038 28,105,000 2026 41,245,000 2029 25,000,000 2039 29,370,000 2027 36,745,000 2030 25,000,000 2040 70,120,000 2028 61,920,000 2031 25,000,000 2041 85,060,000 2029 13,200,000 2032 25,000,000 2042 31,220,000 2030 25,025,000 2033 25,000,000 2031 34,725,000 2032 2043 30,000,000 24,435,000 2033 2044 30,000,000 58,840,000 2034 2045 9,990,000 30,000,000 2046 30,000,000 2047 30,000,000 2048 30,000,000 2049 35,000,000 2050 40,000,000 Preliminary, subject to change#1414 Summary of Potential Bonds to be Refunded* TENSIS Tax-Exempt Refunding Candidates Taxable Refunding Candidates Series Maturity Coupon Par 2012B 6/1/2027 3.000% 35,000,000 CUSIP(1) 57582PF96 Series Maturity Coupon Par CUSIP(1) 2001B 1/1/2021 Variable 48,250,000 NA 2012B 6/1/2042 4.000% 34,000,000 57582RG59 2011D 10/1/2025 3.000% 2012C 10/1/2027 4.000% 31,745,000 57582PG46 2011D 10/1/2028 4.000% 42,000,000 57582PB66 48,000,000 57582PB90 2012C 10/1/2028 3.000% 10,000,000 57582PG53 2013D 8/1/2033 3.750% 20,000,000 57582PN48 2012C 10/1/2029 3.000% 10,000,000 57582PG61 2013D 8/1/2033 4.000% 2012C 10/1/2030 3.000% 22,000,000 57582PG79 2014A 12/1/2034 5.000% 2012C 10/1/2031 3.000% 32,000,000 57582PG87 2014A 12/1/2035 2012C 10/1/2032 3.250% 22,000,000 57582PG95 2014A 12/1/2036 5.000% 5.000% 2012C 10/1/2033 3.250% 21,965,000 57582PH29 2014A 12/1/2037 5.000% 15,000,000 57582PN55 20,000,000 57582PU24 20,000,000 57582PU32 20,000,000 57582PU40 20,000,000 57582PU57 2012C 10/1/2034 3.250% 23,090,000 57582PH37 2014A 2012C 10/1/2035 3.375% 24,275,000 2012C 10/1/2036 3.500% 25,520,000 57582PH45 57582PH52 2014A 2012C 10/1/2037 3.500% 26,690,000 2012C 10/1/2038 3.600% 27,780,000 57582PH60 57582PH78 2018A Total 12/1/2040 12/1/2041 2/1/2021 5.000% 40,000,000 57582PU81 5.000% Variable 20,000,000 57582RYX8 118,505,000 57582RSD9 $431,755,000 2012C 10/1/2039 3.625% 28,915,000 57582PH86 2012C 10/1/2040 3.625% 30,095,000 57582PH94 2012C 10/1/2041 3.625% 31,325,000 57582PJ27 2012C Total 10/1/2042 3.625% 32,600,000 57582PJ35 $469,000,000 (1) Registered trademark of American Bankers Association. No representation is made as to the accuracy of the CUSIP Numbers of the Refunded Candidates. CUSIP numbers are included solely for the convenience of the Holders of the Refunded Bonds. * Preliminary, subject to change#15Preliminary Financing Schedule and Additional Resources Financing Schedule* November/December 2020 S M T W T LL F S 1 2 34 6 7 8 9 10 11 12 13 14 15 16 17 18 19 29 225 23 24 25 26 30 30 1 2 224 20 21 27 28 LO 5 Contact Information Sue Perez Deputy Treasurer 617-367-3900 x816 [email protected] TENSIS Tuesday, November 10: Post POS Friday, November 13 at 2:00PM: Investor Call Wednesday, November 18: Indications of Interest / Retail Order Period Thursday, November 19: Taxable Launch and Tax-Exempt Pricing Thursday, December 3: Closing of the Bonds Kathy Bramlage Senior Debt Analyst 617-367-3900 x494 [email protected] 15 Additional Resources Information Statement as of October 28, 2020 https://emma.msrb.org/MarketActivity/Continuing Disclosure Details/P21077039 Massachusetts Investor Website https://massbondholder.com Department of Revenue https://www.mass.gov/service-details/dor-press-releases-and-reports The Commonwealth of Massachusetts' November 13th Investor Call Replay http://roadshow.munios.com/rs/7VQ9B Preliminary, subject to change#1616 APPENDIX ADDITIONAL INFORMATION#1717 0 10,000 50,000 Personal Income per Capita in $s 20,000 30,000 Connecticut Massachusetts New York New Jersey California Maryland Maryland Washington New Hampshire Source: U.S. Bureau of Economic Analysis 40,000 Wyoming 60,000 70,000 80,000 90,000 Personal Income per Capita by State (2019) Alaska * Colorado Virginia Minnesota Illinois Pennsylvania North Dakota Hawaii * Vermont Vermont Rhode Island Nebraska Delaware South Dakota Dakota Wisconsin Kansas Kansas Oregon Iowa Towa Texas Texas Florida Maine Nevada Ohio Michigan ichigan Missouri Montana Tennessee Indiana • capita income: 131.7% of US average - second-highest rate among Strong wage growth supports the Commonwealth's consistently high per 10-years (vs US rate of 1.2%) The Massachusetts economy is supported by well-trained labor pool, with strong wage growth increasing on average 1.7% annually over past states Utah Georgia Louisiana Oklahoma North Carolina Arizona Idaho South Carolina Arkansas Kentucky New Mexico Ala ba ma West Virginia Mississippi MASSACH TENSIS#1818 GDP in $ Millions 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 California Texas Sources: U.S. Bureau of Economic Analysis; and Moody's Investor's Services Q1 2020 State Gross Domestic Product (GDP) New York Florida Illinois Pennsylvania Ohio New Jersey Georgia Washington Massachusetts Carolina North Carolina Virginia Michigan Maryland Colorado Minnesota Tennessee Indiana Arizona Wisconsin Missouri Connecticut Louisiana South Carolina Alabama Alabama Kentucky Oklahoma • • In 2019, MA GDP rose 2.5%, slightly outpacing US GDP growth MA ranks 11th in state GDP (Q1 2020) and 15th in state population (2.3%) Iowa Utah ova da Nevada Kansas Arkansas Nebraska Mississippi New Mexico ☐ Hawaii New Hampshire Idaho West Virginia Delaware Maine Maine Rhode Island North Dakota South Dakota Alaska Montana Wyoming Vermont MASSACH TENSIS#1919 1,000 4,000 Debt per Capita in $ Millions 2,000 3,000 5,000 6,000 7,000 Debt Per Capita by State (2019) bonding program and debt issued on behalf of the MBTA • Relatively high levels are due in part by the Commonwealth's practice of financing local infrastructure – most notably through the school district capital Connecticut Massachusetts Hawaii New Jersey New York Delaware Illinois Washington Maryland Rhode Island Kentucky California Oregon Mississippi West Virginia Virginia Louisiana Pennsylvania Wisconsin Kansas Minnesota Alaska Ohio New Mexico Arkansas Vermont Georgia Maine Ala ba ma Florida Utah New Hampshire Sources: U.S. Bureau of Economic Analysis; and Moody's Analytics Colorado Michigan Nevada North Carolina Idaho Arizona South Dakota South Carolina Missouri Texas Oklahoma Tennessee Indiana Iowa Montana North Dakota Wyoming Nebraska MASSACHUSETTENSIS SIGILLUM REIPUBLIC#200% 1% 2% 3% 4% 5% 6% 7% 8% 9% Debt as a Percentage of State GDP (2019) Connecticut Hawaii Massachusetts New Jersey Mississippi Kentucky Delaware West Virginia Rhode Island Illinois New York Oregon Maryland Washington Louisiana California Virginia Wisconsin Kansas Arkansas Pennsylvania New Mexico 20 Sources: U.S. Bureau of Economic Analysis; and Moody's Analytics Minnesota • 50 State Median: 1.9% • MA: 7.24% (3rd in the nation) Debt as a percentage of GDP Ohio Maine Vermont Ala ba ma Georgia Alaska Florida Utah Idaho Michigan New Hampshire North Carolina Nevada Arizona South Carolina Colorado Missouri South Dakota Oklahoma Texas Tennessee Indiana Iowa Montana North Dakota Wyoming | Nebraska | MASSAC ACHUSETT TENSIS לפורדנר#21TENSIS 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Source: Moody's, May 10, 2018 Nevada New York Kentucky Kansas Hawaii Illinois Texas *State NTSD debt data as of fiscal 2017 as reported by Moody's; Local Government debt data as of fiscal 2016 as reported by US Census; GDP data as of 2016 Source: State NTSD data from Moody's Investors Service; Local Government debt data from US Census; GDP from US Bureau of Economic Analysis Massachusetts' total state and local government debt burden more in line with peers State NTSD + local government debt as a % of GDP South Carolina Florida Washington California Connecticut Pennsylvania LG Debt % GDP NTSD % GDP • These figures reflect borrowing for school construction and mass transit that other states account for at the local level. When factoring in debt issued by local governments, Massachusetts' leverage is more moderate. State and local debt represents 11.8% of Massachusetts' GDP, ranking the Commonwealth 23rd and approximating the sector median of 11.2% Moody's: Combined State and Local Government Debt Burden in Line With Peers Oregon Colorado Minnesota Arizona New Jersey Louisiana Alabama Tennessee New Mexico Massachusetts Nebraska Mississippi 21 21