KBRA Assigns AA+ Rating to State of Connecticut General Obligation Refunding Bonds (2024 Series E); Affirms Rating for Parity Bonds
July 01 2024 - 2:43PM
Business Wire
KBRA assigns a long-term rating of AA+ to the State of
Connecticut General Obligation Refunding Bonds (2024 Series E).
KBRA additionally affirms the long-term rating of AA+ 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
- 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 second highest per capita
personal income level among all states.
Credit Challenges
- 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.
Rating Sensitivities
For Upgrade
- Significant improvement in the funded ratios for the State’s
pension systems.
For Downgrade
- 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.
Methodologies
- Public Finance: U.S. State General Obligation Rating
Methodology
- ESG Global Rating Methodology
Disclosures
A description of all substantially material sources that were
used to prepare the credit rating and information on the
methodology(ies) (inclusive of any material models and sensitivity
analyses of the relevant key rating assumptions, as applicable)
used in determining the credit rating is available in the
Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be
located here.
Only those ratings on securities issued by this Issuer that also
are denoted on the Security Ratings tab for this Issuer on KBRA.com
as “endorsed” by Kroll Bond Rating Agency Europe Limited into the
European Union and/or by Kroll Bond Rating Agency UK Limited into
the UK are covered by the disclosures set forth in this press
release and the corresponding Information Disclosure Form. No other
ratings on issuances by this Issuer have been endorsed into the
European Union or the UK, and the disclosures set forth herein and
in the corresponding Information Disclosure Form are inapplicable
to those ratings and may not be used for regulatory purposes by
European Union or UK investors in these securities.
Further disclosures relating to this rating action are available
in the Information Disclosure Form(s) referenced above. Additional
information regarding KBRA policies, methodologies, rating scales
and disclosures are available at www.kbra.com.
About KBRA
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit
rating agency registered with the U.S. Securities and Exchange
Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is
registered as a CRA with the European Securities and Markets
Authority. Kroll Bond Rating Agency UK Limited is registered as a
CRA with the UK Financial Conduct Authority. In addition, KBRA is
designated as a designated rating organization by the Ontario
Securities Commission for issuers of asset-backed securities to
file a short form prospectus or shelf prospectus. KBRA is also
recognized by the National Association of Insurance Commissioners
as a Credit Rating Provider.
Doc ID: 1004981
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Analytical Contacts
Peter Scherer, Senior Director (Lead Analyst) +1 646-731-2325
peter.scherer@kbra.com
Douglas Kilcommons, Managing Director +1 646-731-3341
douglas.kilcommons@kbra.com
Karen Daly, Senior Managing Director (Rating Committee Chair) +1
646-731-2347 karen.daly@kbra.com
Business Development Contacts
William Baneky, Managing Director +1 646-731-2409
william.baneky@kbra.com
James Kissane, Senior Director +1 646-731-2380
james.kissane@kbra.com