Wall Street agency gives CT first bond rating upgrade in 20 years
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 — but doesn’t guarantee — 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.
“We are a national leader in combating the COVID-19 pandemic, and due to our wise investments, robust savings, better than anticipated revenues and generous federal support, we are emerging as a financial leader among the states,” said Gov. Ned Lamont. “Our state has many challenges ahead, and there is much more work to be done, but it is essential we continue down this path and foster additional growth to best position us for the long term.”
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.
“Connecticut will now have the ability to access funding for critical infrastructure investments at even more attractive interest rates,” he added.
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 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.
Wall Street’s assessment of Connecticut remained largely unchanged during the 2000s and the first half of the next decade.