HARTFORD – Two of the top credit rating agencies have upgraded Connecticut’s bond ratings, Gov. Ned Lamont and Treasurer Erick Russell announced Wednesday.
Moody’s is upgrading Connecticut from Aa3 to Aa2. Fitch is upgrading the state from AA- to AA. These upgrades mark the seventh and eighth credit rating increases during the Lamont administration. Prior to the start of the administration, the most recent general obligation bond rating upgrade the state received was in 2001.
“Let there be no doubt that Connecticut is back,” Lamont said. “By the end of 2025, the state will have made an additional $10 billion in pension payments since I took office. This is the result of sound fiscal management, a growing trust in Connecticut by businesses and residents, which is reflected in our improved economic statistics, and a historic run in the stock market.”
During the week of Sept. 22, the Office of the Treasurer plans to offer $1.815 billion of GO bonds in three series: $800 million 2025 Series C tax-exempt bonds and $300 million 2025 Series B taxable bonds to fund new projects (municipalities and nonprofits, grants for urban action, community investment fund, school construction, agricultural land preservation, capital improvements and general state purpose), plus approximately $715 million of 2025 Series D refunding bonds to refinance previously issued bonds to lower interest rates and capture debt service savings.
“Ratings agencies continue to validate Connecticut’s creditworthiness, disciplined budgeting, and the progress we’ve made to reduce liabilities and fixed costs,” Treasurer Russell said. “These ratings upgrades will result in even greater demand for our bonds, creating both immediate and long-term savings for taxpayers, while freeing up resources for the state to make critical investments in programs and people.”
In their notice to investors announcing the upgrade, both agencies credited the improvements to recent advances in Connecticut’s budgetary practices.
“The rating upgrade to Aa2 is driven by the state’s well-established strong governance practices that have led to increased budgetary reserves and consistent pension contributions that have begun moderating the state’s very high unfunded pension liabilities,” Moody’s said. “With continued adherence to these policies, the state is expected to maintain solid reserve levels and further reduce leverage metrics.”
Fitch added the upgrade reflects its expectation that Connecticut will maintain policies which foster structural balance while revenues grow in line with national inflation and expenditures grow consistent with statutory budget guardrails.
“During recent meetings with credit rating agencies, they noted the positive change in Connecticut’s financial outlook, paying down long-term debt, saving for the future, and a growing economy,” said state Office of Policy and Management Secretary Jeffrey Beckham. “They also noted that we still have more work to go – we have about $35 billion in legacy debt to eliminate. It is essential that we continue to pay down our debts while continuing to provide access to quality education and housing, keeping our residents safe, and making critical investments in the future.”
