Less than two months after Connecticut received its first bond rating upgrade in 22 years, two more rating agencies have followed suit.
The improving credit scores from S&P and Kroll, each up one notch from their previous ratings for Connecticut, come as the state prepares to sell approximately $1 billion in general obligation bonds next week.
On Thursday, S&P upgraded Connecticut’s general obligation bond credit rating from ‘A’ to ‘A+.’ Later that same day, Kroll Bond Rating Agency increased its general obligation rating for Connecticut from ‘AA-’ to ‘AA.’
S&P on Thursday said Connecticut has moderated its average annual debt growth to 2.5% over the past several fiscal years, down from 7.3% from 2014 to 2017, and that it has also adopted more conservative actuarial assumptions for funding its pension liabilities.
Analysts said the state has seen “strong operating performance” in recent years and during the COVID-19 pandemic, due in part to a revenue volatility cap that mandates budget surpluses of a certain size be socked away in a reserve fund and a revenue cap that bars lawmakers from authorizing budget appropriations exceeding a certain percentage of the state’s revenue forecast in any given year.
Treasurer Shawn Wooden said in a statement that the third upgrade “makes it clear that the smart fiscal policies we’ve practiced over the past few years are working and that we must stay the course.”
“As a result, our bonds will continue to generate greater demand, allowing Connecticut to borrow at even more attractive interest rates, saving taxpayers millions of dollars and creating long-term financial sustainability,” Wooden said.
