Agencies differ on state bond ratings
The state has received positive feedback on its credit from two rating agencies, but was still flagged by a third as needing more cash reserves.
Moody's Investor Services gave Maine its third highest rating, Aa2, for a $58.2 million bond sale scheduled today, while the National Association of Insurance Commissioners' Securities Valuation Office gave the state its highest rating, NAIC-1, according to Capitol News Service. Standard & Poor's, however, continued to keep the state on a negative watch list, writing in its analysis that "Maine's financial position declined significantly in fiscal year 2009 to a weak position" and calling on the state to boost its cash reserves. S&P initially gave Maine a negative bond outlook in March, which lawmakers worried would affect the state's credit rating. Despite its concerns, S&P gave the state a rating of AA-, its fourth highest credit rating out of 10, according to the news service.
State budget officials, including Finance Commissioner Ryan Low and State Treasurer David Lemoine, expressed frustration with S&P's analysis, arguing the state had adequately addressed the agency's concerns, including passing a bipartisan budget. S&P's decision to keep the state on its watch list likely will not affect the interest rate the state has to pay when it sells its bonds, according to the news service.
The state paid about $20,000 for each agency rating, as well as expenses for about six officials to travel to New York to attend the meetings.
Go to the article from Capitol News Service >>
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