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News

Bond Rating Agencies Maintain State’s Credit Ratings and Stable Outlook

May 16, 2008

(AUGUSTA)- All three bond rating agencies, Moody’s Rating Service, Standard & Poor’s, and Fitch Ratings, have maintained their ratings on Maine’s general obligation (GO) bonds. Moody’s rates Maine’s general obligation bonds Aa3 outlook stable; Standard & Poor’s rates Maine’s general obligation bonds, AA, outlook stable; and Fitch rates Maine’s general obligation bonds AA, outlook stable.

“Maine’s bond ratings and stable outlook indicates that the state is fiscally sound. Despite the recent volatility in the bond market, we expect to once again have a very strong bond sale in both the retail and institutional markets,” noted State Treasurer David Lemoine.

All three rating agencies highlight several credit strengths in their reports including: management of spending levels while absorbing substantial K-12 education costs mandated by citizens' initiative, commitment to improving available reserve levels to enhance financial flexibility, and Maine’s low debt burden and very rapid debt amortization.

Credit challenges cited by the rating agencies include: the negative position of the state’s General Fund unreserved balance, narrow liquidity, fiscal uncertainty created by citizen’s initiatives, and slower job growth.

The state plans to sell approximately $103 million of general obligation bonds starting with a retail sale period that will take place on May 16 and 19th and an institutional sale that will take place on May 20th.

Complete bond rating agency reports can be found at: www.fitchratings.com, www.moodys.com, and www.standardandpoors.com.