State Treasurer Calls Connecticut GO Outlooks Bittersweet

March 11, 2016

Two new negative outlooks on Connecticut’s bond ratings represent “bittersweet” news in advance of next week’s $550 million general obligation bond sale, said state Treasurer Denise Nappier.

Moody’s Investors Service and Kroll Bond Rating Agency revised their outlooks on Connecticut GOs to negative from stable ahead of the deal. Standard & Poor’s on Wednesday night continued the negative outlook it imposed in March 2015, while Fitch Ratings reaffirmed its stable outlook.
Moody’s reaffirmed its Aa3 rating; Fitch, S&P and Kroll all affirmed AA ratings.

“While there is the good news that the state’s ratings remain unchanged — which demonstrates continued confidence in our creditworthiness — the Moody’s and Kroll negative outlooks further emphasize the need to fortify the state’s fiscal footing,” Nappier said in a statement Thursday.
The negative outlooks derive from budget strain and high unfunded pension liability.

“We need to immediately start looking at long-term structural changes in the way state government operates,” said state Sen. Scott Frantz, R-Greenwich.

Connecticut plans its institutional sale on Wednesday after a one-day retail order period.

Proceeds will fund $336 million of state building projects and other purposes; $94 million in various grant programs; $76 million in improvements to Connecticut colleges and universities; $30 million in town road aid; and $15 million for the local capital improvement program.

Ramirez & Co., Inc. is book runner. Acacia Financial Group Inc. and A.C. Advisory are financial advisors for the sale, according to Nappier’s office.

Day Pitney LLP and Finn Dixon & Herling LLP are disclosure counsel, with Robinson & Cole LLP and Soeder & Associates LLC as tax counsel.