Moody’s, S&P Global and Fitch Ratings maintain stable outlook
ANNAPOLIS, Maryland – Maryland State Treasurer Nancy K. Kopp announced that the three major bond rating agencies have reaffirmed the state’s AAA bond rating, all with a stable outlook, ahead of the next competitive sale of up to $ 615.0 million in tax-exempt bonds and negotiated sale. up to $ 241.4 million in tax-exempt term redemption obligations. Both are expected to be approved on Wednesday, August 11, 2021.
Maryland is one of thirteen states * to hold the coveted AAA rating, the highest possible rating, awarded by the three major bond rating agencies. S&P Global Ratings has rated AAA bonds since 1961, Moody’s Investors Service has rated bonds AAA since 1973, and Fitch Ratings has rated AAA bonds since 1993.
Treasurer Kopp said, “We are pleased that, as the vaccine rollout allows Maryland to begin to recover from the impact of COVID-19, rating agencies recognize that the state’s proactive response to the pandemic, its steadfast commitment to prudent fiscal management and the reserves it has accumulated over the past decade has helped us weather the worst moments of the crisis. Additionally, Maryland’s vibrant economy, highly skilled workforce, and above average levels of wealth and income put us in a strong position to move forward.
Moody’s Investors Service, explaining the reasons for its Aaa rating, noted that “the fiscal flexibility afforded to Maryland by its public works board … has manifested itself throughout the pandemic” in helping free hundreds of million dollars to close the gaps in fiscal years 2021 and 2022. Moody’s also notes that the state’s better-than-expected performance has simultaneously enabled it to close budget gaps, maintain large reserves and dedicate more than one billion dollars in spending to support Maryland residents and businesses.
Fitch Ratings, giving its AAA rating and stable outlook, noted “Maryland’s” large, diverse and wealthy economy, strong and forward-looking fiscal management, and great fiscal flexibility. ” Fitch notes the importance of federal pandemic assistance and additional state action to support the state’s economy since the onset of the pandemic.
Giving its long-term AAA rating and stable outlook, S&P Global Ratings said, “Maryland’s fundamental economic strengths… have provided some stability to income tax and income collections above expectations for the United States. fiscal year 2021. However, S&P also noted that “although a moderate financial burden on debt service, rapid amortization and sound management of debt affordability remain mitigating …
The bond sale will include up to $ 540.0 million in tax-exempt fresh silver bonds, $ 75.0 million in taxable fresh money bonds and $ 241.4 million in tax-exempt term redemption obligations. The tax-exempt fresh money bonds will be sold in two auction groups to increase competition:
- Bidding Group 1 – $ 259.0 million; and
- Auction Group 2 – $ 281.1 million
The tax-exempt term repayment bonds are underwritten by Bank of America and are expected to generate approximately $ 40 million in debt service savings by 2030.
As is always the case with Maryland General Bond Bonds, the state will use the new funds to finance major capital projects and improvements, such as public schools, community colleges, university projects. and hospitals.
The Maryland Board of Public Works, made up of Governor Lawrence J. Hogan, Jr., Treasurer Nancy K. Kopp and Controller Peter Franchot, will chair the competitive bond sale at its meeting on Wednesday, August 11, 2021.
The Maryland State Treasurer’s office plans to make another bond sale in February or March 2022.
* The other twelve states rated AAA by the three rating agencies are Delaware, Georgia, Florida, Indiana, Iowa, Missouri, North Carolina, South Dakota, Tennessee, Texas, Utah and Virginia.