Projo 7 to 7 News Blog

PROVIDENCE - With the state headed to the bond market early next week to raise more than $107.3 million for past and future education, housing and transportation initiatives, Gen. Treas. Frank Caprio announced today that the three major rating agencies have "affirmed'' the state's current credit rating -- despite high unemployment and sinking state revenues.

In a brief statement earlier today, the treasurer's office said Fitch has affirmed the State's AA- rating and Stable outlook; Moody's has affirmed the State's Aa3 rating and Negative outlook and Standard & Poor's Ratings Services affirmed the state's AA rating and Stable outlook.

According to Caprio spokesman Tim Gray, the treasurer, the governor's office and House Finance Committee chairman Steven Costantino had invited Moody's representatives here on Nov.18 "to make the case that our rating should not be downgraded.''

"They all met for several hours and put on one heck of a presentation, ... and let's face it,'' Gray said, "the way Rhode Island's economy is and the unemployment rate being what it is, it was a difficult sales job, but they pulled it off.''

While not all of the ratings reports were available today, the treasurer's office released the S&P report which said the rating reflects "average wealth indicators with median household effective buying income at 101% of the national level; recently improved, though above-average, debt burden; and historically adequate financial position'' even though state officials "intend to draw down the stabilization fund for fiscal 2008 due to a budget deficit...Offsetting factors include the state's large projected budget gaps for fiscals 2009 and 2010 and potential continued budget pressure.''

"While the outlook remains stable,'' S&P said, "the state faces significant near-term fiscal pressure that will require substantial adjustments to bring the fiscals 2009 and 2010 budgets into structural balance.

"In our opinion, a continued economic slowdown beyond projections will further pressure revenues; and it could hamper the state's progress toward restoring structural budget balance. The state's failure to address its structural imbalance successfully would lead to negative credit implications given the revenue shortfall's growing size.''

Comments

Jake said:

Yeah, it was the presentation. Caprio and his minions are unbelievable!

Link | November 25, 2008 7:50 PM
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