Bangkok--3 Mar--Standard & Poor's
Standard & Poor's Ratings Services assigned its 'AAA' long-term rating, and stable outlook, to Utah's $430 million general obligation (GO) bonds, series 2009A. In addition, Standard & Poor's affirmed its 'AAA' long-term rating on the state's GO debt outstanding and 'AA+' long-term rating on the state's lease secured debt.
The ratings reflect our view of Utah's extremely strong creditworthiness, characterized by a young, well-educated workforce and a diverse economy that is outperforming national trends in employment growth, albeit at a significantly reduced rate compared with recent years; and continued very strong financial management, including proactive mid-year budget adjustments to maintain strong financial reserves. The ratings also reflect our opinion of the state's long track record of cash-funding capital projects, a practice that could be substituted for debt financing if budget or revenue circumstances warranted; and a low debt burden with a short maturity schedules, a well-funded retirement system, and limited other postemployment benefits liabilities.
"The stable outlook reflects our view that Utah's current financial condition is very strong, and the state is making proactive budget adjustments to provide what we view as sufficient cushion to absorb flat economic performance," said Standard & Poor's credit analyst David Hitchcock. The rating anticipates that Utah will continue to make budget adjustments to balance its budget. In the past, the state has taken budget-closing measures to maintain good reserve levels even in periods when tax revenue has been weak. The state has also made efforts to avoid premature draws on its rainy day fund and to replenish draws on reserves when economic times improve.
The bonds are secured by the full faith and credit pledge of the state of Utah. The series 2009A bonds will fund various highway projects.
The state also has lease obligations outstanding secured by annual legislative appropriations. For 12 of the state's appropriated-backed obligations outstanding, leased assets are part of a master facilities pool issued under a 1994 master lease structure.
Complete ratings information is available to RatingsDirect subscribers at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; select your preferred country or region, then Ratings in the left navigation bar, followed by Find a Rating.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
David G Hitchcock, New York (1) 212-438-2022
Gabriel Petek, CFA, San Francisco (1) 415-371-5042
Key Contacts:
Americas Media Relations: (1) 212-438-6667
media_ [email protected]
Americas Customer Service: (1) 212-438-7280
[email protected]