Gov. Kemp: Georgia Secures AAA Bond Rating in 2021

Atlanta, GA – Today Governor Brian P. Kemp announced Georgia again secured the highest ratings of AAA with a stable outlook from each of the three main credit rating agencies: FitchRatings, Moody’s Investors Service, and S&P Global Ratings. Of the states that issue general obligation bonds, only nine currently meet this standard. Georgia’s upcoming general obligation bond sale will fund over $1.1 billion in capital projects. The Peach State's AAA ratings will enable the state to sell its bonds at the lowest possible interest costs when it takes bids for those bonds in early June. The credit rating agencies’ individual ratings are AAA, Aaa, and AAA, respectively, the highest ratings possible, and indicative of sound fiscal management.

"Securing the highest state bond rating for yet another year is a testament to decades of conservative leadership at the state level and our balanced approach in protecting both lives and livelihoods throughout the COVID-19 pandemic," said Governor Kemp. "In a year of unprecedented challenges - working with the General Assembly - we cut taxes, balanced the state's budget, invested in essential services, and avoided draconian budget cuts. These decisions resulted in an unemployment rate below the national average and the lowest of the ten most populated states, record job and investment growth, and being named the top state for business for the eighth year in a row. By working together to put hardworking Georgians first, we'll continue to make Georgia the best state to live, work, and raise a family."

Fitch, Moody’s, and S&P cited the strength of Georgia’s economy with a positive employment trend, growth of the state’s rainy day fund, a balanced approach to primary revenue sources, and consistent funding of obligations as factors contributing to AAA ratings. The credit rating agencies’ individual ratings are AAA, Aaa, and AAA, respectively, which are the highest ratings available and indicative of sound fiscal management.

Bond Rating Agency Report Excerpts

FitchRatings:

“Georgia's 'AAA' Issuer Default Rating (IDR) reflects the state's proven willingness and ability to maintain fiscal balance and a broad-based, growth-oriented economy that supports revenue growth over time. … Growth in population and jobs has outpaced the nation over several decades, driving steady economic gains and providing a solid foundation for future growth. … Georgia’s exceptionally strong gap-closing ability during cyclical downturns derives primarily from its superior budget flexibility and strong reserves. ... Georgia’s long-term liability burden is low, and overall debt management is conservative. The state issues bonds regularly for capital needs and principal amortization is rapid. Georgia fully funds its actuarially determined contributions (ADCs) for pensions supporting a modest net pension liability (NPL) burden.”

Moody’s Investors Service:

“Georgia's Aaa general obligation rating reflects strong finances and liquidity, robust fiscal management and governance, and moderate long-term liabilities and fixed cost burdens. The state’s diverse economy and favorable demographic trends are also key considerations in the rating and factors that will contribute to long-term stability. The stable outlook reflects the expectation that Georgia’s economic fundamentals, financial position, and fiscal management will remain strong and support the current rating.”

S&P Global Ratings:

“Georgia’s ‘AAA’ long-term rating is supported by our view of the state’s overall strong credit fundamentals, including its large and diverse economic base that exhibited comparative resilience relative to the U.S. in light of uncertain public health and safety risks presented by the COVID-19 and management’s implementation of timely structural budget measures…. In our view, Georgia made necessary budget adjustments and emerged from this challenging social and economic landscape in a comparatively steady financial position…. In our opinion, Georgia’s economy is likely to remain resilient given its level of employment diversification and projected economic growth that mirrors the nation… Over the past decade, Georgia has benefited from an expanding economy, strong demographic trends, and improvement in the urban core of metropolitan Atlanta. Before the COVID-19 outbreak, most service sectors of the state’s economy were flourishing. Absent any future pull-back in economic activity to address health and safety risks, the state should be relatively well-positioned for future growth … The state’s debt burden, in our view, is moderate and should remain so…. Georgia maintains its commitment to adequately funding its pension liabilities and in recent years has started to prefund its other postemployment benefit (OPEB) obligations.”