BREAKING NEWS: Maryland’s AAA Rating From S&P Is Unchanged

ANNAPOLIS (August 9, 2011) - Standard & Poor’s has issued a report dated August 8, 2011, State And Local Government Ratings Are Not Directly Constrained By That Of The U.S. Sovereign. A complete copy of the report is available at http://www.standardandpoors.com/ratings/articles/en/us/?assetID=1245316634562

Standard & Poor’s Maryland analyst stated, “There is no action on MD's rating.” In the report S&P indicates, “A minority of state and local obligors rated by Standard & Poor’s have achieved the highest long-term rating of ‘AAA’. We expect that many of these obligors, particularly those with relatively low levels of funding interdependencies with the federal government or those that, in our view, are likely to manage declines in federal funding without weakening their credit profile, should be able to retain ratings above the U.S. sovereign rating…”

The State Treasurer’s Office has been and will continue to be in contact with all three rating agencies to emphasize the qualitative evaluation factors that should be considered by the rating agencies (e.g., a history of prudent financial management, a highly educated workforce, a strong, diverse economy, a Constitutionally dedicated tax for bond debt service and a fiscal condition that is better than most states) while they assess the impact of federal government actions.

Treasurer Kopp stated, “We are pleased to see that Standard & Poor’s is looking at the states individually, and we believe that Maryland’s prudent fiscal management will be viewed positively by the rating agencies as they review the states.”

The State Treasurer has noted that there was very strong investor demand for Maryland’s general obligation bonds in the recent bond sale on July 27, 2011 as demonstrated by the fact that the true interest cost was among the lowest since 1988. These bonds closed on August 5, 2011. Series A, totaling $71.7 million, was purchased by retail investors, primarily Maryland citizens. Series B, totaling $418.3 million, was purchased by Banc of America Merrill Lynch who had the winning bid of 7 bids. The State also received 8 and 9 bids on Series C and Series D, respectively.