State maintains its bond rating ahead of $107 million bond sale on Monday

PROVIDENCE 11/25/2008 - General Treasurer Frank T. Caprio announced today that the three major ratings agencies have determined that the State of Rhode Island's bond rating should remain at its current level.

A bond rating is a grade given to bonds that indicates their credit quality. Private independent rating services such as Standard & Poor's, Moody's and Fitch provide these evaluations of a bond issuer's financial strength, or its ability to pay a bond's principal and interest in a timely fashion.

Bond ratings are expressed as letters ranging from 'AAA', which is the highest grade, to 'C' ("junk"), which is the lowest grade. Different rating services use the same letter grades, but use various combinations of upper- and lower-case letters to differentiate themselves.

In order to make the State's case that Rhode Island's bond rating should not be lowered, General Treasurer Caprio invited Moody's to the State House on November 18th to hear a presentation from state officials.

Leading the meeting were: Treasurer Frank T. Caprio; House Finance Chairman Steven Costantino; Executive Director of the State's budget office, Rosemary Booth Gallogly and Paul Dion from the Department of Revenue

"It was a team effort highlighting the strong financial management practices of the state. Now, it's up to state leaders to make the necessary changes to our budget to maintain this momentum," said Caprio.

Current RI Bond Ratings:

Moody's has affirmed the State's Aa3 rating and Negative outlook S&P has affirmed the State's AA rating and Stable Outlook Fitch has affirmed the State's AA- rating and Stable outlook

General Obligation Bond Sale on Monday

On the heels of the Moody's rating, Rhode Island will price $107.3 million in general obligation bonds on Monday and Tuesday. On Monday, December 1st, the bonds will be offered exclusively to retail investors. On Tuesday, December 2nd, the bonds will be made available to major institutions.

"These bonds should prove very attractive to Rhode Island citizens, since the Series B and D bonds are free of both state and federal tax," Caprio said. The Series C bonds are subject to federal income tax.

The upcoming bond sale is a result of voter-approved borrowing from the 2004 and 2006 election. The bulk of the money will go towards projects such as: transportation; open space; a biotech research center at URI and upgrades at Roger Williams Park Zoo. Other major capital improvement projects will also benefit from the bond sale, as will affordable housing and historic preservation.

"The $107 million will help the local economy," Treasurer Caprio said.

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