Press release from the treasurer’s office:
May 24, 2021
Hartford, CT – Today, Connecticut State Treasurer Shawn T. Wooden announced that all four major credit rating agencies have raised the state’s credit rating in the past 45 days. Connecticut’s previous credit rating improvement took place over two decades ago.
âThe tide has really turned for Connecticut,â said Treasurer Shawn Wooden. âSince taking office, improving Connecticut’s credit rating has been a top priority for me. The unanimous consensus of the four major credit rating agencies is clear evidence that significant improvements have been made in the situation. Connecticut’s budget. This unified “seal of approval” will not only save taxpayers millions of dollars, but will also pay dividends to the long-term financial sustainability of our state. While challenges remain, it should pay off. families and businesses have strong confidence that Connecticut’s economic future is bright. “
âWhen I took up my post for the first time in 2019, I embarked on a multi-state roadshow to meet investors,â continued Treasurer Wooden. âAt the time, the markets were doing exceptionally well, but I knew it was not sustainable. We immediately took a number of calculated steps to prepare to put Connecticut in a better position in the event of an economic downturn. Since then, our credit ratings have continued to be affirmed, despite the unforeseen financial distress caused by the COVID-19 pandemic. While other states have been put on negative or demoted outlook during the pandemic, Connecticut has now secured credit rating increases from all four credit rating agencies. “
“Specific actions I have taken that have helped improve our grades include:
- Restructuring of the financing of the teachers’ pension system and reduction of the return on investment assumption;
- Protect the Budgetary Reserve Fund from being used for other purposes;
- Maintain prudent debt management practices, including refinancing previously issued bonds to reduce debt service costs;
- Reduce the risk of our retirement portfolio and take advantage of investment opportunities;
- Allocation of surplus budgetary reserve funds to reduce unfunded pension liabilities; and
- Advocate for policies that contribute to economic growth and vocational training. “
âPrior to these credit rating increases, three of our four general bond credit ratings were in the ‘A’ category,â continued Treasurer Wooden. âToday, three out of four credit ratings are in the ‘AA’ category.
âToday’s fourth rating update in the past 45 days is another indication that the state’s smart fiscal policies and management over the past several years are working and will continue to benefit the government. State, âcontinued Treasurer Wooden. “As a result, our bonds will generate greater investor demand, allowing us to borrow at even more attractive interest rates, saving taxpayers millions of dollars and lowering future costs of servicing debt. Debt. While this is great news for Connecticut, our job remains to continue to strengthen our state for all families in Connecticut by addressing weak spots and ensuring our rising tide lifts all boats. “
Summary of rating actions
On March 31, Moody’s Investors Service upgraded the Connecticut General Bond (âGOâ) bond credit rating from âA1â to âAa3â with a stable outlook. At that time, Moody’s also upgraded the credit rating of Special Tax Obligation (“STO”) bonds from “A1” to “Aa3” and University of Connecticut bonds from “A1” to “Aa3”. .
On May 13, S&P Global Ratings upgraded the Connecticut GO Bond credit rating from âAâ to âA +â with a stable outlook and also upgraded the Government’s STO bond from âA1â to âAA-. “.
On May 13, Kroll Bond Ratings upgraded the Connecticut GO Bond credit rating from âAA-â to âAAâ with a stable outlook.
And finally, earlier today, on May 14, Fitch Ratings upgraded the Connecticut GO Bond credit rating from “A +” to “AA-” with a stable outlook and also improved University bonds. of Connecticut from “A” to “A +”.
These four rating actions now mean that all credit rating agencies have upgraded the government’s GO rating.
Upcoming General Bond Sale
The treasurer’s office is preparing to offer investors $ 1 billion in GO bonds next week in four different series. The sale includes $ 600 million in bonds to fund new projects (building local schools, economic development, housing, and municipal grants) and $ 400 million in bonds to pay off existing bonds to lower mortgage rates. interest in savings.
Bonds issued to finance new school building grants, or to refinance previously issued school building bonds, will be marketed as âsocial bondsâ, a first for the state. Social bonds are a growing trend in the market, allowing investors to invest directly in bonds that fund socially beneficial projects.
This press release was produced by the office of the treasurer. The opinions expressed here are those of the author.