Fitch Ratings, one of the three major agencies evaluating government bond issuances, has reaffirmed its highest rating of AAA for Maryland’s general obligation bond sale later this month. Fitch also gave the Maryland outlook a rating of “stable.”
From a press release carried on the Wall Street Journal‘s Marketwatch site, citing the underpinnings of the state’s top rating:
KEY RATING DRIVERS
CONSERVATIVE FINANCIAL OPERATIONS: Financial operations are conservative, and the state maintains a well-funded rainy day fund. The state took repeated action during the course of the recession to address projected budget gaps, including raising tax revenues, cutting spending, and using rainy day and other balances.
STRONG DEBT MANAGEMENT: Debt oversight is strong and centralized, and the debt burden is moderate. The state has policies to maintain debt affordability, and the constitution requires GO and transportation bonds to amortize within 15 years.
PENSION FUNDING REFORMS: Pension funding levels have deteriorated, although the state has undertaken extensive pension and other post-employment benefit (OPEB) reforms.
BROAD ECONOMY: The state has a diverse, wealthy economy, benefiting from its proximity to the nation’s capital.