NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) has assigned a long-term rating of AA with a stable outlook to the State of Connecticut’s $500 million General Obligation Bonds (2015 Series A) and Taxable General Obligation Bonds (2015 Series A). In addition, KBRA affirms the long-term rating of AA with a stable outlook on the State’s outstanding General Obligation Bonds, excluding Bonds backed by a letter of credit or liquidity facility. After issuance of these Bonds, the State’s outstanding general obligation debt will total approximately $16.5 billion.
Connecticut’s economic recovery is continuing, though at a slower pace than the New England region and the U.S. as a whole. KBRA views the State’s financial position as having improved under the current administration, but projects that budget pressures will continue as long as economic growth is relatively slow. KBRA views the State’s budget challenges as mitigated by the State’s demonstrated ability and willingness to raise revenues and make spending cuts during the fiscal year to maintain balanced operations. KBRA also views positively the increase in the funding of the Budget Reserve Fund, which has increased to $519.2 million or approximately 3.0% of FY 2014 General Fund expenditures. When the Governor took office in January 2011, his administration developed a plan for conversion to GAAP-based budgeting from a modified cash basis and for the funding of the long standing General Fund deficit. The FY 2014-FY 2015 biennium budget was the State’s first budget to be developed on a GAAP basis and the State has implemented a funding plan to fund the GAAP-based General Fund deficit. The State has continued to fully fund its actually required pension contributions (ARC) for its State pension programs. KBRA views the State’s liquidity position as fairly strong.
The rating is based on KBRA’s U.S. State General Obligation Rating Methodology published on March 28, 2012. The Bonds are general obligations of the State and are secured by Connecticut’s full faith and credit pledge. All General Obligation Bond debt service of the State is deemed appropriated without further action by the State Legislature. Proceeds of the General Obligation Bonds will be used for various capital projects of the State.
Please use the following links to view KBRA’s full report and tear sheet on the State:
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KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).