Connecticut has received its first bond rating upgrade since 1988 ”“ something State Treasurer Shawn Wooden said “sends a clear signal that (our) improved long-term financial sustainability will contribute towards a strong economic recovery.”
Moody”™s Investors Service has upgraded Connecticut”™s general obligation bonds credit rating from “A1” to “Aa3,” the first such credit rating upgrade for Connecticut in just over 20 years.
The rating upgrade impacts $16 billion of general obligation bonds, $1.7 billion of University of Connecticut bonds (also upgraded from A1 to Aa3), as well as approximately $6 billion of special tax obligation bonds issued for transportation purposes (again, upgraded from A1 to Aa3).
Other state-backed bonds issued by quasi-public agencies were also upgraded.
The Moody”™s change comes a few months after Wooden and Office of Policy and Management Secretary Melissa McCaw made presentations to all four credit rating agencies on Nov. 30 and Dec. 1, 2020.
The presentations highlighted the state”™s improving economy and fiscal controls and included a comparison of Connecticut”™s reserves, liquidity, debt levels, pension funding, employment, housing market indicators as well as other data as compared with other higher-rated states.
Wooden said the upgrade “is a direct result of our smart fiscal policies practiced during the past few years that have led to Connecticut having a record high budget reserve fund and a strong cash position.
Connecticut will now have the ability to access funding for critical infrastructure investments at even more attractive interest rates which will strengthen our economic recovery and save taxpayer dollars in the long-term.”
“The upgrade of Connecticut”™s GO (general obligation) rating to ”˜Aa3”™ reflects the state”™s continued commitment to numerous governance improvements that have already borne fruit in the accumulation of significant budgetary reserves and good financial performance through the pandemic,” Moody”™s stated.
Wooden said he hoped the other credit ratings agencies would follow suit. “The next step is to continue building a stable foundation for future growth and financial sustainability as we emerge from the Covid crisis.”
The other three credit rating agencies”™ general obligation credit ratings and outlooks are S&P Global Ratings at “A” with a stable outlook; Fitch Ratings at “A+” with a stable outlook; and Kroll Bond Rating Agency at “AA-” with a stable outlook.
The state is preparing to sell up to $800 million of general obligation bonds in May and June.
