Press Release|Public Finance
KBRA Assigns AAA Rating to State of Maryland General Obligation Bonds, State and Local Facilities Loan of 2026, First Series Tax-Exempt Bonds (Competitive); Affirms Rating for Parity Bonds
21 May 2026 | New York
KBRA assigns a long-term rating of AAA to the State of Maryland General Obligation Bonds, State and Local Facilities Loan of 2026, First Series Tax-Exempt Bonds (Competitive) and affirms the long-term rating of AAA for the State's outstanding General Obligation Bonds. The rating Outlook is Stable.
Key Credit Considerations
The rating actions reflect the following key credit considerations:
Credit Positives
- Inherent strength and breadth of the State GO payment pledge
- Established history of conservative budget management and maintenance of prudent reserves through economic cycles.
- Governor has broad executive authority to reduce spending to maintain budget balance.
Credit Challenges
- Economic growth lags that of the Nation.
- Highest reliance on federal employment among the 50 states amid the current federal administration’s focus on shrinking federal employment will be a headwind to economically sensitive tax receipts over the near to medium term.
- Federal policy changes to Medicaid cost-sharing and SNAP administration costs will increase program costs for the State. The full extent of these additional costs is not yet known.
Rating Sensitivities
For Upgrade
- Not applicable at AAA rating level.
For Downgrade
- Deeper than anticipated impact of federal employment and contract cuts resulting in sharp and continuing decline in economic indicators and State revenue performance.
- Significant deterioration in reserves and liquidity to levels no longer consistent with the rating level.
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