Fitch and S&P Global ratings systems have both rated Connecticut’s general obligation (GO) bonds, expected to sell on Oct. 18, ‘AA-‘ – an outlook considered stable.
The rated bonds include $585 million GO bonds (2016 series E) and $65 million GO bonds (2016 series F – green bonds). The ratings parallel a similar rating in June by S&P Global Ratings.
In its overall analysis, Fitch finds that despite “chronic” economic and fiscal challenges, high fixed costs and “ongoing uncertainty,” Connecticut’s “recent state corrective actions have primarily been structural in nature, and state managers continue to pursue fiscal management changes to improve the state’s longer term prospects.”
Conditions that favor the state include its wealthy economic base, an “unlimited” legal ability to levy taxes, and a “strong” capacity to close budget gaps, Fitch said.
Holding Connecticut back, however, are a “burden of debt and unfunded pension liabilities” that, in relation to resources, among the highest in the country.
