Idaho has received top bond ratings from three ratings agencies for its upcoming annual sale of Tax Anticipation Notes, state Treasurer Ron Crane announced today; the favorable ratings mean easier sales and better interest rates. Said Crane, “Our bonds are so highly sought after in the market that we generally receive nine times the demand for the paper we are selling at any given time. It is not unusual for us to sell a half a billion dollars in Idaho bonds within an hour.”
Idaho will make its annual sale of short-term notes on the bond market on June 19, with $500 million in bonds; click below for Crane's full announcement.
Office of the State Treasurer
FOR IMMEDIATE RELEASE
State Treasurer: Idaho Receives Top Bond Rating
Moody’s, Fitch and S&P Rating Places Idaho in a Highly Competitive Position in Bond Market
June 13, 2012 (Boise, Idaho) — Idaho State Treasurer Ron Crane announced the state’s Tax Anticipation Notes (TANs) have received top ratings from Moody’s, Standard and Poor’s and Fitch rating services this week leading up to the $500 million in short term notes going on the bond market on June 19th.
Crane says the action by the agency gives Idaho a leg up on other bonds in the marketplace.
“Our bonds are so highly sought after in the market that we generally receive nine times the demand for the paper we are selling at any given time,” Crane said. “It is not unusual for us to sell a half a billion dollars in Idaho bonds within an hour.”
Fitch gave Idaho an F1+ rating, Moody’s an MIG1, and S&P an SP-1+ due to a number of factors that show Idaho credit status is among one of the strongest in the nation. Fitch cited at least two major areas that put Idaho in this strong position.
“The state follows conservative budget practices and has demonstrated a willingness to use broad balancing actions in response to economic and revenue weakness and the state is rebuilding reserves that were depleted during the recession,” the Fitch Ratings report said.
“The Governor and the Legislature have been key players in these improved ratings,” Crane said.
“Their leadership and willingness to make the tough decisions in tough economic times have put us in an enviable position compared to the rest of the nation.”
In general, the three rating services cited the following as reasons for these top ratings:
· Solid coverage which employs a fourth quarter pledge of all general fund revenues to repay
the notes plus a long list of internal borrowable resources.
· Constitutional requirement for a balanced budget.
· Holdback authority for the Governor to employ early in the fiscal year – and the historical
demonstration of a willingness to use that authority.
· Legislative willingness and strong history of backing up the Governor’s holdbacks by using
negative supplemental appropriations – conservative budgeting of finances.
· Early efforts to begin refilling the “reserve” and “rainy day” accounts.
· Low debt level and excellent pension fund management.
· Economic recovery is progressing steadily while unemployment is gradually reducing.