(From the Ohio Treasurer’s Office)
Ohio Treasurer Robert Sprague announced a credit rating upgrade from Standard & Poor’s Global Ratings (S&P) to AA+ for Ohio’s Major New State Infrastructure Project Revenue Bonds. S&P cited the “expectation that pro forma maximum annual debt service (MADS) coverage will remain very strong” as well as “Ohio’s demonstrated history of maintaining an adequate level of lawfully available funds” and “strong federal and state programmatic support” among reasons for the upgrade.
“This key credit rating upgrade is a testament to strong fiscal management by our office, as well as our ongoing partnership with the Ohio Department of Transportation,” said Treasurer Sprague. “The AA+ rating from Standard & Poor’s will lower the costs of financing for ODOT and help them use federal Title 23 money more efficiently when funding construction projects around the state.”
The AA+ rating indicates a high degree of creditworthiness and can be attributed to the office’s timely repayment to bond holders, efficient management of Title 23 monies, and a commitment to prudent management of the Highway Operating Fund. The improved rating from Standard & Poor’s comes in connection with a Major New State Infrastructure Project Revenue bond issuance to be used by ODOT for construction projects. These bonds are debt-financing instruments that are eligible for reimbursement using future Federal-aid highway funding under Title 23. Some of these projects include bridge replacements, pavement rehabilitation, and lighting upgrades. Ohio’s Major New State Infrastructure Project Revenue bonds are also backed by a secondary pledge of other lawfully available funds in the Highway Operating Fund.
In December of 2023, S&P Global Ratings upgraded the state of Ohio’s issuer default and general obligation bond ratings to AAA. The Major New State Infrastructure Project Revenue bond rating was not included in the upgrade at that time, due to the fact that investors are repaid from federal reimbursements. The last time these bonds were upgraded by S&P (to the AA rating) was over 20 years ago, in 2003. Ohio’s issuer default rating and general obligation bonds hold the highest ratings possible of “AAA/Aaa/AAA” from S&P Global Ratings, Moody’s Investors Service, and Fitch Ratings.