State Treasurer Beth Pearce Comments on Moody’s Downgrade of Vermont’s Bond Rating

23 October 2018

MONTPELIER, VT — Vermont State Treasurer Beth Pearce issued the following statement after Moody’s Investors Service announced that the state’s Aaa bond rating was revised downward to Aa1 with a stable outlook.

“The Treasurer’s Office was notified today that Moody’s Investors Service has downgraded the general obligation credit rating of the State of Vermont from Aaa to Aa1, their second highest rating. No change has been made by Fitch Ratings, for which Vermont has the highest possible AAA rating, nor Standard & Poor’s, for which Vermont has the second highest AA+ rating.

“In their report, Moody’s identified several areas of concern. We need to work collaboratively to address issues such as Vermont’s aging population, slow economic growth, and above average long-term pension and post retirement liabilities relative to GDP. These challenges are real, but they are accompanied by many positive strengths that have been identified by all three rating agencies.

“Moody’s decision follows April 2018 changes to the criteria they use to assess state financial health. While Moody’s updated methodology made maintaining a Aaa rating more challenging for small states, such as Vermont, this is not the time to resign ourselves to that outcome. Vermont is still the highest rated state in New England.

“I am confident that the Governor, General Assembly, and my office will partner with other state and local officials to address our shared challenges. We must focus on regaining our Aaa rating and achieving a triple-A rating from all three rating agencies as we work together to improve the economic prosperity of all Vermonters.”
 

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