Standard & Poor's top score given to State for its upcoming sale of $350 million in Tax Anticipation Notes

Providence, RI 8/4/2009 - Rhode Island General Treasurer Frank T. Caprio announced today that Standard & Poor's rating service has assigned its highest short term rating of SP1+ for Rhode Island's planned issuance of Tax Anticipation Notes for the Fiscal Year 2010 (FY 2010) budget.

The rating was obtained in preparation for the State's planned sale of $350 million of general obligation Tax Anticipation Notes (TANs), scheduled for the week of August 10, 2009.

"The strong rating by Standard & Poor's provides real benefits to taxpayers, especially during these challenging times," said Treasurer Caprio.

"The SP1+ rating was awarded to Rhode Island as a result of the strong financial management practices demonstrated by the Office of the General Treasurer, as well as the State and Legislative Budget offices," Caprio emphasized.

"A strong credit rating means lower borrowing costs and enhanced market access," Caprio continued. "Due to the size and term of the borrowing, the State will save more than $1.5 million for every half of one-percent reduction in the interest rate."

The rating reflects Standard & Poor's opinion of:

* The adequate debt service coverage (DSC) by projected reserves, and stronger coverage when additional budgeted expenditure reductions are included.

* The general creditworthiness of Rhode Island (AA/Negative general obligation (GO) debt rating).

Proceeds of the TANs issue will be used to pay general State expenses as they occur. The TANs will be repaid in full on June 30, 2010 with tax revenues received by the State.

Underwriters for the $350 million sale of the TANs are Janney Montgomery Scott and Citibank.

Related links