PROVIDENCE – Fitch Ratings recently affirmed the state’s existing credit risk and bond ratings and offered a stable rating outlook.
The state’s Issuer Default Rating and general obligation bonds again received “AA” ratings, while the certificates of participation and revenue bonds for the R.I. Convention Center Authority and R.I. Commerce Corp. were all upheld as “AA-.”
In its analysis, the ratings agency noted the state’s “conservative and prudent fiscal management” and “moderate” long-term liability position as reasons for its ratings. While the pandemic continues to pose short- and long-term budget uncertainty, the state’s revenue declines have not been as severe as originally predicted thanks to the $1.25 billion in federal Coronavirus Aid, Relief, and Economic Security Act funding – $900 million of which has been spent – and conservative initial revenue forecast revisions, as well as a $120 million transfer from the state’s reserve rainy day fund.” As a result, a budgetary downturn will not necessarily affect the state’s long-term credit profile, the ratings agency said.
The agency also noted that the labor market declines in Rhode Island have been among the deepest across the country, although its recovery has also outpaced national and state labor market trends.
Still, uncertainty persists over the public health implications of the virus, which are closely tied to state economic performance.
Nancy Lavin is a staff writer for the PBN. Contact her at Lavin@PBN.com.
