All three major rating agencies reaffirm AAA rating for Maryland bonds


Moody’s, S&P Global and Fitch Ratings maintain stable outlook

ANNAPOLIS, Maryland— Maryland State Treasurer Nancy K. Kopp announced that all three major bond rating agencies have reaffirmed the state’s AAA bond ratings, all with stable outlooks, ahead of the next competitive bond sale. a maximum of $615.0 million of tax-exempt new money bonds and the negotiated sale. up to $241.4 million in tax-exempt term redemption bonds. Both are expected to be approved on Wednesday, August 11, 2021.

Maryland is one of thirteen states* to hold the coveted AAA rating, the highest possible rating, assigned by the three major bond rating agencies. S&P Global Ratings has rated AAA bonds since 1961, Moody’s Investors Service has rated bonds with AAA ratings since 1973, and Fitch Ratings has rated AAA bonds since 1993.

Treasurer Kopp said, “We are pleased that as the vaccine rollout allows Maryland to begin to recover from the impact of COVID-19, rating agencies recognize that the state’s proactive response to the pandemic, its constant commitment to prudent fiscal management and the reserves it has built up over the past decade have helped us overcome the worst moments of the crisis. Additionally, Maryland’s vibrant economy, highly skilled workforce, and above-average levels of wealth and income have placed us in a position of strength as we move forward.

Moody’s Investors Service, explaining the rationale for its Aaa rating, noted that “the fiscal flexibility given to Maryland by its Public Works Board…has manifested itself throughout the pandemic” in helping free up hundreds of million to fill the gaps in fiscal years 2021 and 2022. Moody’s also notes that the state’s better-than-expected performance allowed it to simultaneously close budget gaps, maintain sizable reserves, and provide more than a billion in spending to support Maryland residents and businesses.

Fitch Ratings, in assigning its AAA rating and stable outlook, noted the “large, diverse and wealthy economy, strong and forward-looking fiscal management, and ample fiscal flexibility.” Fitch notes the importance of federal pandemic assistance and the additional steps the state has taken to support the state economy since the pandemic began.

In assigning its AAA long-term rating and stable outlook, S&P Global Ratings said, “Maryland’s economic fundamentals…provided some stability in income tax collections and better-than-expected revenue performance over the course of the year.” of fiscal year 2021.” However, S&P also noted that “although a moderate financial debt service burden, rapid amortization and strong debt affordability management remain mitigating strengths…if government bonds are outpacing economic growth, this could put pressure on our view of the government debt profile.”

The bond sale will include up to $540.0 million in tax-exempt new money bonds, $75.0 million in taxable new money bonds and $241.4 million in refundable bonds. term tax exempt. The new tax-exempt monetary bonds will be sold in two auction groups to enhance competition:

  • Bid group 1 – $259.0 million; and

  • Auction group 2 – $281.1 million

The tax-exempt term repayment bonds are underwritten by Bank of America and are expected to generate approximately $40.0 million in debt service savings by 2030.

As is always the case with Maryland general bond bonds, the state will use the new money proceeds to fund major capital projects and improvements, such as public schools, colleges communities, university projects and hospitals.

The Maryland Board of Public Works, consisting of Governor Lawrence J. Hogan, Jr., Treasurer Nancy K. Kopp and Comptroller Peter Franchot, will preside over the competitive bond sale at its meeting on Wednesday, August 11, 2021.

The Maryland State Treasurer’s Office plans to conduct another bond sale in February or March 2022.

* The other twelve states rated AAA by the three rating agencies are Delaware, Georgia, Florida, Indiana, Iowa, Missouri, North Carolina, South Dakota, Tennessee, Texas, Utah and Virginia.


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