Rhode Island’s Credit Rating Upgraded to AA+ by Fitch

News Summary

Rhode Island’s creditworthiness has improved as Fitch Ratings upgraded the state’s Long-Term Issuer Default Rating from ‘AA’ to ‘AA+’. This upgrade bolsters investor confidence ahead of a significant bond sale exceeding $270 million, aimed at funding essential state initiatives. With multiple bond series being issued, the sale is anticipated to attract both individual and institutional investors. Fitch’s positive rating reflects improved fiscal management and declining long-term liabilities, contributing to Rhode Island’s overall financial stability and ongoing pension reforms.

Rhode Island has received a positive boost to its credit standing, as Fitch Ratings upgraded the state’s Long-Term Issuer Default Rating (IDR) from ‘AA’ to ‘AA+’. This upgrade signifies Rhode Island’s strong commitment to fiscal management and economic growth, reinforcing confidence among investors ahead of an upcoming bond sale. Fitch Ratings has also assigned a “AA+” rating to the anticipated general obligation (GO) bond issuance, which will take place on June 9 and includes a total bond offering exceeding $270 million.

The bond sale comprises several components: $196.3 million in tax-exempt series A bonds, $27.6 million in federal taxable series B bonds, and $49.8 million in tax-exempt series C bonds. Historically, bonds issued by Rhode Island have been attractive to investors due to their ability to deliver competitive returns with minimal risk. The Rhode Island Treasury is actively seeking to appeal to both individual and institutional investors, emphasizing the collective impact on essential public projects.

Investing in these bonds plays a critical role in supporting various state initiatives including education, infrastructure development, clean energy, and housing projects. The positive credit rating reflects a decline in the state’s long-term liability burden, which Fitch analysts indicate has contributed significantly to improving Rhode Island’s fiscal outlook. Furthermore, pension reforms implemented in 2012 have yielded growing financial relief for the state, improving its financial stability.

As of June 2024, Rhode Island’s pension system is reported to be 63% funded, with a total liability amounting to $4.7 million. However, Fitch has advised caution regarding possible new pension changes that could entail near-term liabilities for the state, underscoring the importance of sustaining the current positive fiscal trajectory.

The state’s credit ratings have also been reinforced by reaffirmations from Standard & Poor’s and Moody’s, both of which maintain positive ratings for Rhode Island, reinforcing its overall financial stability. This collective encouragement positions Rhode Island well to attract further investments during the upcoming bond sale.

To engage potential investors, the Rhode Island Investor Conference recently brought together over 100 stakeholders, including investors, analysts, and public officials, to discuss investment opportunities within the state. This engagement strategy aims to foster a deeper understanding of how bond investments can significantly benefit local communities, further enhancing the sense of community ownership and involvement in state projects.

As the bond offerings are designed to not only provide competitive returns but also ensure funding for critical state initiatives, the Rhode Island Treasury emphasizes the broader community benefits. Local residents investing in these bonds are encouraged, as their contributions will help drive forward essential services and infrastructure within the state.

For any further inquiries or detailed information regarding the bond offerings, interested parties can visit the dedicated website at www.rhodeislandbonds.com, which serves to educate potential investors on how their investments can effectuate positive changes within Rhode Island.

Deeper Dive: News & Info About This Topic

• Rhode Island Current: Fitch Upgrades RI Credit Bond Ratings
• Providence Journal: State of Rhode Island GO Bond Offering
• Boston Globe: Rhode Island GO Bond Offering Has Begun
• Providence Business News: Health Care Bond Use Grows Nationally
• Google Search: Rhode Island Bonds