Connecticut on May 14 received its third credit agency rating upgrade this week, bringing its total to four this year ”“ something that State Treasurer Shawn Wooden said “makes it clear that the smart fiscal policies we”™ve practiced over the past few years are working and that we must stay the course.”
Fitch announced it was upgrading Connecticut’s Issuer Default Rating (IDR) from “A+” to “AA-“ with a Stable outlook ”“ a move it said “reflects enhancements to the state’s fiscal management practices in recent years that are materially increasing the state’s resilience to absorb economic and revenue cyclicality.”
On May 13, S&P Global Ratings upgraded Connecticut”™s General Obligation bonds credit rating from “A” to “A+” with a Stable outlook and also upgraded the State”™s Special Tax Obligation (STO) bonds from “A1” to “AA-”.
Also on May 13, Kroll Bond Rating upgraded the state”™s General Obligation bond credit rating from “AA-” to “AA”. Wooden said that the upgrades impact $17 billion of General Obligation bonds.
This marks the fourth time the state has received a credit rating upgrade after over 20 years of no positive actions. On March 31, Wooden announced that Moody”™s Investors Service upgraded Connecticut”™s General Obligation bonds credit rating from “A1” to “Aa3” with a Stable outlook. At that time, Moody”™s also upgraded the STO bonds credit rating from “A1” to “Aa3” and the University of Connecticut bonds from “A1” to “Aa3”.
As a result of the upgrades, Wooden said, “Our bonds will continue to generate greater demand, allowing Connecticut to borrow at even more attractive interest rates, saving taxpayers millions of dollars and creating long-term financial sustainability.”
Gov. Ned Lamont called the upgrades “validations that our administration is putting Connecticut on the right track. For years, we”™ve seen negative headlines about our finances and the state”™s fiscal position, but this is even more proof that we are seeing sustained progress by addressing the sins of the past and investing in the future of this great state.”
Crediting the state”™s handling of the pandemic with playing a significant role, the governor said: “Now is not the time to disrupt the fragile economic and financial environment by levying large-scale tax increases or creating massive new spending programs. This is the time to continue our strong financial practices, pay down our long-term debt, and foster growth that will enhance our long-term prospects and ensure that everyone knows the future is bright in Connecticut.”
“These credit rating upgrades are certainly good news and reflective of the hard work and difficult decisions we have had to make,” added Office of Policy and Management Secretary Melissa McCaw, “and it is a reminder that in order for us to move ahead, we must keep our focus on investment and sustainability in the years and decades to come.”
