From The Delaware Business Times
WILMINGTON – Delaware once again received the highest possible bond ratings from all rating agencies ahead of the state’s issuance of $300 million in general obligation bonds later this month.
The news that all four major bond rating agencies – Fitch Ratings, Moody’s Investor Services, S&P Global and Kroll Bond Rating Agency (KBRA) – upheld Delaware’s AAA bond rating in January reviews was heralded by Gov. John Carney’s office in a Wednesday, Jan. 15, announcement. The state last queried ratings agencies in August and next plans to issue its 2020A series of bonds Jan. 22.
The ratings are important because higher grades translate into lower interest costs in repayment of the bonds. The agencies look at a variety of criteria, including a state’s economy, government’s financial performance and management, debt load, long-term costs, and political structure. States that analysts believe could better whether recessions or economic downturns are in turn seen as safer risks and awarded higher ratings.
“Over the last three years, we have climbed out of a $400 million budget deficit to create a $200 million surplus,” Carney said in a statement. “These are funds that will ensure Delaware has the flexibility to continue making improvements to our schools, our local economy, and the overall health of our state.”
The agencies noted the successful efforts the Carney administration and the Delaware General Assembly to bolster reserves by creating a new Budget Stabilization Fund that has a current balance of $126 million with S&P stating that “we believe the state can maintain better credit characteristics than the U.S. in a stress scenario.”