Affirmation of Maine’s credit ratings come as other states see downgrades

Moody’s and S&P affirm Maine’s stable bond rating amid COVID-19

Wed, 05/27/2020 - 9:30pm

AUGUSTA — Governor Janet Mills and State Treasurer Henry Beck announced May 27 Moody's Investors Service and Standard & Poors Global Ratings (S&P), providers of global credit benchmarks, have affirmed their credit ratings and outlooks on the State of Maine's general obligation debt, according to a news release.

“Moody's affirmed both their 'Aa2 rating and stable outlook on Maine's debt. S&P affirmed their AA rating and stable outlook,” the release stated. “The affirmation of Maine’s ratings comes as S&P and Moody’s downgrade other states’ ratings as a result of the economic turmoil precipitated by the COVID-19 pandemic.”

Governor Mills and Treasurer Beck both praised the announcement in a joint press release. 

“This is welcome news and a validation of our Administration’s bipartisan work with the Legislature to enact responsible budgets and manage State government in a fiscally sound manner,” said Governor Janet Mills. “Difficult decisions lie ahead, but these stable ratings demonstrate that Maine is a worthy investment as we prepare to advance bonds to fix our roads and expand broadband in rural Maine.”

“Moody's and S&P affirming our stable credit rating during this economic crisis speaks to the strong fiscal management by Governor Mills and the Legislature,” said Treasurer Beck. “Seven states have seen downgrades recently, but not Maine. Bond rates have stabilized since March and yields for high grade 10-year bonds are near all-time lows. Funding these vital projects now makes sense for the market and for Maine.”

Reflecting on Maine's credit strengths, Moody's specifically identified Maine’s adherence to governance best practices, the release stated.

S&P Global wrote, according to release, they believe “Maine’s active budget management and good reserve profile will help the state to navigate through the economic uncertainty and stresses brought on by the COVID-19 pandemic.”

Under the Mills Administration, and with the bipartisan support of the Legislature, the Budget Stabilization Fund has grown by more than $50 million to a record high of nearly $258 million.

Treasurer Beck and members of the Executive Branch presented to Moody's and S&P via telephone on May 11.

State Treasurer Henry Beck intends to conduct a bond sale funding projects totaling $141 million in June 2020, the release stated.

Initiatives benefiting from the bond sale include highways, bridges, senior housing and weatherization, upgrades at the Maine Community College System and the University of Maine System among several other initiatives.