Press Release|Public Finance
KBRA Affirms AAA Rating for State of Connecticut Special Tax Obligation Bonds, Transportation Infrastructure Purposes
26 Sep 2024 | New York
KBRA affirms the long-term rating of AAA with a Stable Outlook for the State of Connecticut Special Tax Obligation Bonds, Transportation Infrastructure Purposes.
Key Credit Considerations
The rating affirmation 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.
- The State’s commitment to transportation capital funding is strong and is buttressed by the public support for transportation purposes reflected in the passage of the November 2018 referendum.
- Legal protections are very 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 levels and budgetary pressure on the State.
To access rating and relevant documents, click here.