Strong credit ratings assigned to Maine’s general obligation debt
State Treasurer Henry Back announced today that Moody’s Investors Service and Standard & Poor’s Global Ratings, 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 its Aa2 rating and stable outlook on Maine’s debt. S&P affirmed its AA rating and stable outlook. But both agencies cited “weak demographic trends” as challenges the state faces going forward.
“These positive, stable ratings indicate that Maine’s finances and economy are strong,” Beck said in a news release. “As the Legislature continues budget negotiations, I urge lawmakers to invest in critical priorities, pay down the state’s debt to the federal government, and continue investment in the Budget Stabilization Fund. I also urge policy-makers to thoughtfully heed commentary from rating agencies about Maine’s demographic challenges. It is clear that strengthening our ratings will largely hinge on our ability to encourage the growth of high-wage business sectors and create a welcoming environment for new Mainers whether they join us from other states or around the world.”
Moody’s, S&P cite ‘weak demographic trends’
Reflecting on Maine’s credit strengths, Moody’s specifically identified Maine’s stable economy, improving financial position, and “institutionalized governance best practices.” Moody’s added that its stable rating outlook results from Maine’s healthy revenue performance and long-standing best practices that have led to an improving financial position.
S&P credited Maine with recent deposits into the “budget stabilization fund,” low debt and modest pension liability, liquidity provided by access to a large cash pool, and “a history of active budget management that we expect to continue.”
Reflecting on the challenges faced in Maine, Moody’s pointed to Maine’s weak demographic trends. S&P also remarked on Maine’s demographic growth trends, including having the oldest population in the nation, while acknowledging that the state’s unemployment rate is lower than the national average and noting that the state has invested in programs aimed at keeping young graduates after college.
Beck said in the news release that he and members of Gov. Janet Mills’ executive branch presented to Moody’s and S&P in Portland on May 15.
Beck said he intends to conduct a bond sale totaling $161.1 million in June.
Initiatives benefiting from the bond sale include projects to support Maine colleges; provide access to high-skill, low-cost technical and career education; stimulate investment through commercialization and research and development; and invest in highway and bridge infrastructure projects throughout Maine.
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