Business Excellence Awards
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By PBN Staff
By PBN Staff
PROVIDENCE – Fitch Ratings has assigned an AA rating to Rhode Island’s $40.65 million in 2013 consolidated-loan, general-obligation bonds, the agency announced Wednesday.
In addition, Fitch affirmed the AA rating of the state’s $1.17 billion in outstanding GO bonds and the AA- rating of $556.6 million in outstanding appropriation-backed debt.
The rating outlook for all three bonds is stable.
Fitch cited several factors for the rating, including strong fiscal management, improved financial performance and proactive moderation of the state’s unfunded liabilities.
“While the state’s combined burden of debt and unfunded pension liabilities is well above average, the state’s comprehensive reform of its pension systems [in 2011] significantly improved funded ratios while lowering annual required contributions,” the report stated.
The Fitch report also mentioned the outstanding lawsuits that challenge the 2011 pension reforms and could negatively impact the state.
“Fitch believes there could be considerable financial loss to the state if retroactive payments to employees and retirees were to be required,” said the report. “Additionally, the state’s liability position would be expected to weaken and additional budgetary allocations would be required to maintain pension funding levels.”
While Fitch anticipates modest revenue growth in fiscal year 2014, Rhode Island’s budget outlook assumes manageable structural gaps in the out-years that will require continued fiscal discipline, the report stated.