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HARTFORD, CT – Kroll Bond Rating Agency has upgraded Connecticut’s General Obligation bond credit rating from AA (stable) to AA+ (stable), one step below the highest credit rating possible, the Lamont administration has announced.
In 2022, S&P also upgraded the state’s credit rating following four additional upgrades in 2021 by all four major credit rating agencies, including Moody’s, S&P, Fitch, and Kroll. Before Governor Ned Lamont’s term, Connecticut had not experienced an upgrade since February 2001, according to Lamont’s administration.
“Wall Street recognizes that Connecticut’s fiscal guardrails are important to our state’s economic turnaround, which is building growth and opportunity for all our residents. Today’s news will result in reduced costs that will help us make critically needed investments in infrastructure, health and human services, education, economic development, and other key areas,” said Lamont. “This will also mean lower fixed costs in our budget, providing additional resources for essential services in future years. Maintaining the fiscal guardrails and all statutory caps in our budget are essential to leaving our state in better shape than we found it for our children and grandchildren.”
Erick Russell, the state treasurer, said the Kroll’s upgrade is a testament to the success of Connecticut’s financial guardrails and culture of budgetary discipline.
Russell said his office and the Office of Policy and Management made clear in their credit rating presentation that they addressed long-standing liabilities, built reserves, and invested in economic growth to have Connecticut well-positioned for future success.
Russell appreciated Kroll’s recognition of those accomplishments and Connecticut’s credit strength with the upgrade. “This will result in lower costs for taxpayersd to finance critical projects that will help shape the future of Connecticut,” he said.
In its notice to investors released today (May 18), Kroll wrote, “The rating upgrade for the State of Connecticut’s General Obligation Bonds reflects the state’s strong credit profile and significant and continuing progress in improving its financial position over the last six fiscal years. Also recognized at the revised rating level is the recent February 2023 extension of certain statutory fiscal guardrails, which KBRA believes position the state to maintain strong reserves and achieve further progress in addressing its large unfunded pension liabilities in the years ahead.”
During the week of May 29, 2023, the Office of the Treasurer plans to offer $700 million of General Obligation Bonds in three series: $100 million 2023 Series A tax-exempt bonds and $350 million 2023 Series A taxable bonds to fund new projects (grants to municipalities and nonprofits, housing projects, economic development, Small Business Boost Fund, school security, brownfields, Town Aid Road, state parks), plus approximately $250 million of 2023 Series B refunding bonds to refinance previously issued bonds to lower interest rates and capture debt service savings.
–-With Jay Domingo/PDM