Rating Agencies Reaffirm Vermont’s High Bond Ratings

14 August 2017

MONTPELIER, VT — As the Vermont State Treasurer’s Office prepares to sell approximately $100 million in general obligation bonds, Treasurer Beth Pearce and Governor Phil Scott were notified that Vermont has maintained the highest bond ratings in the Northeast, and among the highest in the U.S

The reaffirmed ratings came after Governor Scott and Treasurer Pearce led members of the Administration and Treasurer’s Office to meet with each of the rating agencies in New York to review Vermont’s economy, finances and fiscal outlook. As part of a rating review for an upcoming bond sale, all three agencies maintained their previous high rating with a stable outlook.

“I want to thank the Governor and his team for this joint effort to secure and maintain Vermont’s triple-A bond rating,” said Treasurer Pearce. “At the Treasurer’s Office, we undertake a prudent approach to managing the State’s finances and building our budget reserves. Vermont remains one of the top states to invest in. I look forward to working with the Administration and General Assembly to continue our work to improve Vermont’s economic future.”

Vermont bonds were rated Aaa by Moody’s Investor Service and AAA by Fitch Ratings, the highest ratings available to government issuers. Standard & Poor’s Global Ratings maintained its AA+ rating of Vermont bonds, their second highest rating. A high bond rating reduces the cost of borrowing for the State of Vermont and for various State authorities who rely on the State’s moral obligation when selling their debt. Organizations like the Vermont Municipal Bond Bank (VMBB), Vermont Economic Development Authority (VEDA), Vermont Student Assistance Corporation (VSAC), and Vermont Housing Finance Agency (VHFA) all rely on Vermont’s triple-A bond rating to carry out their institutional missions.

“I am very pleased the rating agencies have once again reaffirmed Vermont’s bonds are a sound investment, illustrating the importance of our focus on fiscal responsibility and strong fundamentals,” said Governor Scott. “I appreciate the work of the Treasurer, and thank her and her entire office, as well as our Agency of Administration. Maintaining the triple-A rating makes Vermont’s bonds more attractive to investors, which support our efforts to grow Vermont’s economy and make Vermont more affordable by reducing the overall cost of funds.”

In reaffirming their ratings, the agencies cited Vermont’s strong financial management, conservative debt management practices, maintenance of budgetary reserves at their statutory limits, and the collaborative effort undertaken by the executive and legislative branches to annually balance the budget.

“Many states are facing tough economic challenges,” noted Treasurer Pearce. “Vermont’s continued fiscal stewardship has helped us to maintain these ratings through all market cycles, reaping huge financial dividends to our taxpayers. I am proud of Vermont’s nonpartisan commitment to fiscal responsibility and conservative debt management. I want to thank the Governor and the General Assembly for their collaborative efforts.”

The series A Citizen Bonds will be offered on Monday, August 21 with first priority given to Vermont residents and businesses. The bonds will be sold on a negotiated basis with Morgan Stanley as the senior manager and Bank of America Merrill Lynch, Citigroup, and J.P. Morgan as co-managers. The State will sell the Series B bonds on Wednesday, August 23 on a competitive bid basis.

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