VERMONT STATE TREASURER BETH PEARCE COMMENTS ON 
S&P GLOBAL RATINGS’ RATING AFFIRMATION AND OUTLOOK REVISION 

10 November 2020

Vermont State Treasurer Beth Pearce issued the following statement after S&P Global Ratings announced their affirmation of the State’s bond rating and revision of the rating outlook: 

“S&P Global Ratings has affirmed the State of Vermont’s AA+ general obligation and AA- moral obligation bond ratings. The affirmation includes a revised outlook from stable to negative. As noted by S&P, Vermont’s demographics and historic population trends have not been favorable. Additionally, the State’s retirement liabilities have grown, despite ongoing reforms and the General Assembly’s sustained efforts to meet or exceed actuarially determined contribution levels. While the rating has not changed, the negative outlook is an additional wake-up call that we need to address both our demographic changes and pension liabilities. 

“Across the country, state stressors have been exacerbated by the COVID-19 public health and economic crisis. According to our financial advisor, there have been 17 negative revisions of other states by the three major rating agencies since March. In June, Moody’s Investors Service and Fitch Ratings affirmed the State’s current ratings of Aa1 and AA+, respectively. That notwithstanding, we recognize that more work needs to be done to continue to maintain our best in New England bond ratings. Our goal will be to regain our stable outlook, and ultimately achieve a triple-A bond rating. 

“We are proud of Vermont’s credit strengths as highlighted in the S&P report. These include ‘regular forecast updates, annual midyear budget adjustments, consistent reserve levels across economic cycles, and debt affordability oversight.’ The Treasurer’s Office has always worked collaboratively with the Governor and the General Assembly on these strengths and challenges, and we look forward to continuing to address these issues together in the new biennium. This will require a joint effort by all parties.”   

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