The Kroll Bond Rating Agency upgraded Connecticut’s long-term general obligation rating to AA-plus from AA on Thursday.
The upgraded rating continues Kroll’s stable outlook and reflected Connecticut’s “strong credit profile and significant and continuing progress in improving its financial position over the last six fiscal years,” the agency said.
KBRA pointed in particular to the extension of fiscal guardrails by state lawmakers in February that have required unappropriated general fund balances and personal income tax receipts past a threshold be directed into reserves or towards other long-term obligations.
Those measures helped pad reserves by $2.7 billion while providing $8.6 billion in supplement funding for pension debt since they were instituted in 2018, KBRA said.
They were set to expire at the end of the fiscal year, but state lawmakers unanimously approved a new package in February, guaranteeing the extension of current measures while instituting several new policies including an increase to the reserve fund cap to 18% of budgeted appropriations.
The upgrade comes in connection with Connecticut’s plans to sell $710 million of GO bonds the week of May 29.
KBRA said it believed the legislation’s smooth passage signaled a “broad continuing support” among government for the state’s healthy financial practices.
Over the last two years, Connecticut’s seen several rounds of upgrades from major rating agencies, including a boost to its GO rating to AA-minus from A-plus with a positive outlook from S&P Global Ratings in November.