KBRA Assigns AA+ Rating to State of Connecticut General Obligation Bonds 2024 Series A, B and C; Affirms Rating for Parity Bonds
7 Dec 2023 | New York
KBRA assigns a long-term rating of AA+ with a Stable Outlook to the State of Connecticut: General Obligation Bonds (2024 Series A); General Obligation Bonds (2024 Series B) (Social Bonds); and, General Obligation Refunding Bonds (2024 Series C) (Social Bonds). KBRA additionally affirms the long-term rating of AA+ with a Stable Outlook for the State's outstanding General Obligation Bonds.
Key Credit Considerations
The rating actions reflect the following key credit considerations:
- State is projected to complete FY 2024 with a BRF balance exceeding the statutory cap at 15% of general fund appropriations and is positioned to direct surplus resources toward supplemental pension contributions for a fifth consecutive year.
- Strong financial management framework and recent extension of enhanced statutory fiscal guardrails through at least FY 2028 position the State for strong operating results.
- Strong wealth levels with the highest per capita personal income level among all states.
- Lower relative growth in the economic indicators of population, employment, and gross state product, although there are recent signs of growth in population.
- Unfunded pension liabilities and tax-supported debt burden are high relative to personal income, each more than 3x the respective U.S. average. However, the State borrows for many local purposes and the comparison on a combined state and local basis is more moderate.
- Significant improvement in the funded ratios for the State’s pension systems.
- Structural operating deficits in the general fund.
- Sustained weakening in the State’s employment base and economic activity.
To access rating and relevant documents, click here.