Gov. Nathan Deal announced today that Georgia once again has received triple-A bond ratings from all three major municipal bond rating agencies. The ratings are in advance of next week's planned General Obligation Bond Sale.
Georgia is one of just eight states -- the others are Delaware, Iowa, Maryland, Missouri, North Carolina, Utah and Virginia - with the coveted triple-A ratings from all three rating agencies.
Moody's, Standard & Poor's and Fitch all have assigned the top bond ratings with stable outlook to the state, with individual ratings being Aaa, AAA and AAA, respectively. A triple-A rating is the highest rating available to a bond issuer.
"Retention of the top bond ratings during the current economic climate illustrates the state's commitment to sound fiscal management and willingness to take action to structurally balance the budget," said Deal.
The state is expected to sell $400.8 million of general obligation bonds early next week through competitive bid. The offerings include two series of tax-exempt bonds for new capital projects totaling $247 million, and two series of tax-exempt refunding bonds totaling $153.8 million. The refunding bonds will be used for debt service savings.
The Bond Ratings
"The highest-quality rating is supported by Georgia's conservative fiscal management, moderate debt burden and relatively well-funded pensions," reported Moody's. "Budgetary reserves that were largely used up by the end of FY 2010 are slowing being rebuilt. The outlook for the state's debt remains stable based on our expectation Georgia will take appropriate steps to restore balanced financial operations and replenish reserves as the economy recovers." Moody's also stated that the state's credit strengths included conservative fiscal management, prompt responses to revenue declines and rapid reserve building after the 2001 recession.
Fitch's report recognized Georgia's sound fiscal management practices. "The longstanding "AAA' rating and Stable Outlook on the state's GO bonds reflect its conservative debt management, a proven willingness and ability to support fiscal balance and a diversified economy," said the Fitch report. "The state continues to demonstrate a commitment to balanced operations despite recession-related revenue weakness."
Standard & Poor's also reported on the state's management practices. "Georgia's budget management framework is what we consider good. The executive branch has broad powers to adjust appropriations and there is a track record of making politically difficult revenue and expenditure decisions to restore balance during the fiscal year," S&P reported. "Standard & Poor's considers Georgia's financial management practices to be "strong.'" A score of strong indicates that financial management practices are strong, well embedded and likely to be sustainable.