Press Release|Public Finance
KBRA Assigns AAA Rating to State of Connecticut Special Tax Obligation Bonds, Transportation Infrastructure Purposes 2024 Series A and Refunding Bonds 2024 Series B; Affirms Rating for Outstanding Bonds
12 Nov 2024 | New York
KBRA assigns a long-term rating of AAA to the State of Connecticut Special Tax Obligation Bonds, Transportation Infrastructure Purposes, 2024 Series A and Special Tax Obligation Refunding Bonds, Transportation Infrastructure Purposes, 2024 Series B. KBRA additionally affirms the long-term rating of AAA for the State's outstanding Special Tax Obligation Bonds, Transportation Infrastructure Purposes. The rating Outlook is Stable.
Key Credit Considerations
The rating actions reflects the following key credit considerations:
Credit Positives
- Diverse pledged revenue sources provide a stable source of payment and solid coverage of debt service requirements.
- Legal protections are favorable including a covenant to maintain at least 2.0x annual debt service coverage.
Credit Challenges
- The State’s rate of economic growth has been slower than that of the U.S. and New England region for more than a decade although wealth levels are favorable.
- Transportation needs are substantial and place pressure upon the State’s ability to fund them over the longer term.
Rating Sensitivities
For Upgrade
- Not applicable at AAA rating level.
For Downgrade
- An economic downturn that leads to a sustained decline in coverage and budgetary pressure on the State.
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