News
Moody's Rating Changes to Aa3
May 24, 2005
For immediate release
Contact: Barbara Raths, Assistant Treasurer
May 24, 2005
207-624-7477
(Augusta)- Moody's Investor Service has changed Maine's General Obligation
bond rating to Aa3, a rating shared by: Alabama, Arizona, Connecticut,
Illinois, Mississippi, Montana, New Jersey, Oklahoma, Oregon, Rhode Island,
West Virginia, and Wisconsin. On February 4, 2005, Moody's placed Maine on
a "watchlist" for a possible downgrade.
In their announcement today, Moody's cited: (1) budget challenges with the
depletion of the State's reserves and continued use of tax anticipation notes,
(2) frequent citizen initiative/people's veto activity as adding an element of
fiscal uncertainty; (3) the base closure announcement which would cost Maine
7,000 jobs directly and 12,000 or more jobs indirectly; and (4) the use of
bond proceeds for current pension payments.
State Treasurer, David Lemoine, said, "This rating change was not unexpected
given our many challenges."
Moody's did note that Maine's conservative debt management compares
favorably to other states, with debt ratios on both per capita and personal
income basis remaining below 50-state medians.
Lemoine noted, "Despite this change, Maine's bonds remain one of the most
secure investments around."
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