In Midst of COVID-19 Economic Crisis, Moody's and S&P Affirm Maine's Stable Bond Rating
Governor Janet Mills and State Treasurer Henry Beck announced today that Moody’s Investors Service and Standard & Poors Global Ratings (S&P), providers of global credit benchmarks, have affirmed their credit ratings and outlooks on the State of Maine’s general obligation debt. Moody’s affirmed both their ‘Aa2 rating and stable outlook on Maine’s debt. S&P affirmed their AA rating and stable outlook. The affirmation of Maine’s ratings comes as S&P and Moody’s downgrade other states’ ratings as a result of the economic turmoil precipitated by the COVID-19 pandemic.
“This is welcome news and a validation of our Administration’s bipartisan work with the Legislature to enact responsible budgets and manage State government in a fiscally sound manner,” said Governor Janet Mills. “Difficult decisions lie ahead, but these stable ratings demonstrate that Maine is a worthy investment as we prepare to advance bonds to fix our roads and expand broadband in rural Maine.”
“Moody’s and S&P affirming our stable credit rating during this economic crisis speaks to the strong fiscal management by Governor Mills and the Legislature,” said Treasurer Beck. “Seven states have seen downgrades recently, but not Maine. Bond rates have stabilized since March and yields for high grade 10-year bonds are near all-time lows. Funding these vital projects now makes sense for the market and for Maine.”
The Senate and House Chairs of the Appropriations and Financial Affairs Committee (AFA) also issued the following statements in response:
“On the Legislature’s Appropriations and Financial Affairs Committee, my colleagues and I have consistently drafted strong, bipartisan budgets and made responsible spending decisions to meet the needs of our state and build up our savings. Our efforts continue to pay off,” said Senator Cathy Breen, Senate Chair of AFA. “I’m pleased that the bond rating agencies recognize the work that we’ve all done to keep our fiscal house in order. As we approach the sale of infrastructure bonds in June, this rating will attract investment in our improvements in roads, bridges, and internet access, and it will promote job growth.”
“During these uncertain times, it is great to get some encouraging financial news,” said Representative Drew Gattine, House Chair of AFA. “These positive ratings will translate into favorable interest rates when Maine goes to market to fund highway and other infrastructure projects – including broadband for rural Maine, on the ballot this July. It is gratifying to see Maine achieve credit ratings that reflect the responsible stewardship that the Legislature, the State Treasurer and the Administration have worked in partnership to achieve.”
Reflecting on Maine’s credit strengths, Moody’s specifically identified Maine’s adherence to governance best practices. S&P Global wrote they believe “Maine’s active budget management and good reserve profile will help the state to navigate through the economic uncertainty and stresses brought on by the COVID-19 pandemic.”
Under the Mills Administration, and with the bipartisan support of the Legislature, the Budget Stabilization Fund has grown by more than $50 million to a record high of nearly $258 million.
Treasurer Beck and members of the Executive Branch presented to Moody’s and S&P via telephone on May 11. State Treasurer Henry Beck intends to conduct a bond sale funding projects totaling $141 million in June of 2020. Initiatives benefiting from the bond sale include highways, bridges, senior housing and weatherization, upgrades at the Maine Community College System and the University of Maine System among several other initiatives.