Connecticut Gets Top Bond Rating
by Connecticut State Treasurer Shawn T. Wooden
For the first time in 20 years, a Wall Street credit rating agency has formally upgraded its rating of Connecticut’s finances. Moody’s Investors Service upgraded its ranking for two types of state bonds, a move that could generate reduced borrowing costs going forward.
“This rating upgrade is exceptional news for Connecticut and sends a clear signal that its improved long-term financial sustainability will contribute toward a strong economic recovery,” state Treasurer Shawn T. Wooden said Wednesday. Wooden called the upgrade “a direct result of our smart fiscal policies practiced during the past few years” that have left state government with a record-high $3 billion emergency budget reserve.
Moody’s raised Connecticut’s bond rating from A1 to Aa3 — from its fifth-highest ranking to its fourth-highest. The Aa3 rating also places Connecticut in the “high quality” bond category rather than “upper medium” grade. The rating upgrade impacts $16 billion of General Obligation bonds, $1.7 billion of University of Connecticut bonds (upgraded from A1 to Aa3 also), as well as approximately $6 billion of Special Tax Obligation bonds issued for transportation purposes (upgraded from A1 to Aa3 also). In addition, other state backed bond issued by quasi-public agencies are also
Connecticut will now have the ability to access funding for critical infrastructure investments at even more attractive interest rates which will strengthen our economic recovery and save taxpayer dollars in the long-term.
The state borrows billions of dollars annually by selling bonds on Wall Street, using the funds for municipal school construction, highway and bridge upgrades, capital projects at state colleges and universities, economic development programs, state building renovations, clean water projects and other initiatives.