North Carolina's financial responsibility and strong fiscal oversight have once again been recognized, as State Treasurer Brad Briner announced the confirmation of the state's 'AAA' issuer rating by Moody's Ratings. The agency upheld North Carolina's praiseworthy status on outstanding general obligation bonds, in a move seen by industry observers as a testament to the state's economic resilience and governance. Also, the state's appropriations bonds and GARVEE bonds maintained their robust Aa1 and Aa3 ratings, respectively.
In anticipation of new infrastructural developments, Moody’s assigned an Aa1 rating to the State of North Carolina’s upcoming Limited Obligation (Build NC) Bonds, Series 2025, and an Aa3 rating to its forthcoming Grant Anticipation Revenue Vehicle Bonds and Refunding Bonds, Series 2025. Amounting to a combined $775 million, these bonds will funnel much-needed investment into North Carolina's expanding transportation network. These earmarks not only speak to the state's developmental priorities but also underscore confidence in its economic management.
While acknowledging North Carolina's susceptibility to climatic and fiscal shifts, Moody's outlook remains stable. The rating agency pointed to the state’s economic performance and governance quality as keys to sustaining a very strong financial stance with modest leverage. "The stable outlook anticipates that economic outperformance and good governance will assure that North Carolina retains a very strong financial position with low leverage," explained Moody's in their assessment, as per the Department of State Treasurer.
North Carolina boasts one of the lowest leverage among the states, ranking 11th, and possesses considerable fiscal reserves amounting to $25 billion, characteristics that unsurprisingly contribute to its AAA rating. Despite past delays in budget approval and ongoing tax reductions that could potentially diminish future revenue, the state's financial health stands resilient. "Even with the challenges from Hurricane Helene, economists recognize the state, through solid legislative leadership, was able to maintain a strong Rainy Day Fund and with a budget surplus," Treasurer Briner told the North Carolina Department of State Treasurer.
It is a notable point of pride for the Tar Heel State, as it remains among just 14 states to claim the prestigious AAA bond rating. This continues to reflect the vigilant stewardship of the N.C. Department of State Treasurer’s State and Local Government Finance Division, which handles all state and local debt processes and assures the dependable repayment of debts. A confirmation by Moody's at this level is indeed, a rare feather in the cap for states vying for economic stability and investor confidence in an age where fiscal prudence is paramount.
