Fitch Gives Highest Possible Rating for Ohio General Obligation Bonds
FOR IMMEDIATE RELEASE
November 29, 2011
Credits Treasurer Josh Mandel's conservative
investment strategy and careful financial management as key factors
– Amidst yesterday's news of Fitch downgrading the United States' outlook from
stable to negative, Ohio Treasurer Josh Mandel is announcing Fitch giving the
highest possible short term rating of F1+ for Ohio's general obligation (GO)
bonds. Fitch credited the Ohio
Treasurer's conservative investment strategy and careful financial management
as key factors in making this decision.
Fitch also cited notable increases in the state treasurer's liquidity
account, even amidst a struggling economy and tepid national growth, as well as
the state's bolstering of its once depleted rainy day fund.
Treasurer I have focused on tightening the belt of government, reducing budget
costs by streamlining operations and eliminating waste, and being a watchdog
over Ohio taxpayers' hard earned money.
We have made tough decisions to ensure that even amidst economic
volatility, Ohio taxpayer dollars are protected,” said Treasurer Mandel. “State lawmakers in Ohio have tackled budget
deficits and spending imbalances head on, and our credit ratings have improved
as a result. In the Treasurer's office
we have worked hard to optimize the state's liquidity portfolio, which has also
contributed to these positive credit ratings.”
Ratings affirmed the F1+ short-term rating on Ohio's approximately $650.7
million adjustable rate GO bonds, for which the Treasurer's office provides
liquidity. The F1+ rating is Fitch's
best quality grade, and indicates an exceptionally strong capacity for timely
payment of financial commitments.
Fitch's credit summary that accompanied the release of Ohio's F1+ rating, they
noted, “The rating reflects the strength of the state's general obligation
credit, the ample liquidity provided by investments in the state treasurer's
liquidity account, and the procedures in place to insure timely payment of
optional tenders of bonds that have not been remarketed.” They also noted, “The investment profile is
conservative as the fund is invested in U.S. Treasury and agency securities,
highly rated commercial paper, and money market funds.”
also cites Ohio's improved budget stabilization fund balance in their
rating. Ohio's budget stabilization fund
reached a low point in 2009 under previous administrations when the fund had
been depleted down to just $0.89.
July, Ohio's AA+ credit rating outlook was raised by Standard & Poor's from
"negative" to "stable," in part because of conservative
management of debt in the Treasurer's office.
This rating was given even as S&P issued a historic downgrade of the
August, the State Treasury Asset Reserve of Ohio (STAR Ohio) - a $4 billion
pooled investment fund for government subdivisions ranging from municipalities
to school districts - received the highest rating possible from S&P, AAAm, even
as 14 similar state and local government investment pools were downgraded.
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