PROVIDENCE – The three major credit rating services kept the state of Rhode Island’s credit rating unchanged last week, despite the financial struggles of state government, according to General Treasurer Frank T. Caprio.
“It’s an important decision as it affects the ability of the state to borrow money and sell bonds in the future,” said Caprio. “It is very good news for Rhode Island.”
Last week, the state successfully issued $150 million in historic structures tax credit financing program series 2009A bonds (federally taxable). The bonds, which have a final maturity in 2018, were sold with JP Morgan and Citibank as lead underwriters.
The R.I. Economic Development Corporation (EDC) bonds that mature in 2010 yielded 1.6 percent, while the bonds that mature in 2018 yielded a return of 6.17 percent.
The bonds, which received an A+ rating from Fitch Ratings, are the first to be issued to reimburse the state for tax credit claims under the historic structures tax credit program launched in 2002.
As part of the budget balancing for the fiscal 2009 budget, the General Assembly approved up to $356.2 million in EDC bonds to fund tax credit claims. At the same time, a moratorium on new projects was put into place.
The current offering is expected to fund $60.8 million in claims in fiscal 2009 as well as claims in fiscal 2010 and, if proceeds remain, fiscal 2011.
The ratings from the three services are:
• Standard and Poor’s (S&P) affirmed the state’s AA rating with a negative outlook and assigned an AA- rating with a negative outlook to both the Certificates of Participation and the Historic Tax Credit bonds.
• Moody’s Investors Service also affirmed the state’s Aa3 rating and assigned an A1 rating to both the Historic Tax Credit bond sale and Certificates of Participation.
• Fitch Ratings affirmed the State of Rhode Island’s rating at AA- with negative outlook, while assigning an A+ rating to the RIEDC $150 million revenue bonds and the Certificates of Participation.
This week, Rhode Island plans to sell $52 million in tax-free bonds through Lease Participation Certificates.
