Top state officials are expected in New York next week to defend the state’s nearly perfect bond ratings and persuade one of three agencies to take the grade up a notch.
Last year, major bond rating agencies Moody’s Investor Service and Fitch Inc. awarded Tennessee with a AAA rating, the highest mark possible. The third agency — Standard and Poor’s — docked the state one grade lower to AA+.
“We hope that, at the very least, we’ll stand pat and hopefully get that third AAA rating,” said Blake Fontenay, spokesman for Comptroller Justin Wilson’s office, which is charged with managing bond sales for the state.
“The more we can save on interest rates, the better that is for taxpayers,” he said.
Gov. Bill Haslam, a Republican, and four of his top state officers will make the case to the leading bond rating agencies on Monday and Tuesday that Tennessee’s state budget and economy are on sound financial footing.
Joining him will be Wilson, Finance and Administration Commissioner Mark Emkes, Treasurer David Lillard, Secretary of State Tre Hargett and members of their staff.
House Speaker Beth Harwell and House Republican Leader Gerald McCormick are also accompanying the governor to represent a united front with the Republican-led Legislature.
Bond ratings are directly related to the interest rates charged to the state when it borrows money. The higher the rating from the bond agencies, the lower the interest rate the state qualifies for when it borrows money.
State officials last year worried the rating agencies would dock the state after it became one of four in the country singled out for concerns it depends too much on federal government assistance. In response, the state assembled a plan for how it would continue government operations if federal funding was slashed, which convinced Moody’s to take the state off its watch list.
New bond ratings typically are announced about a month after the governor’s meetings with the bond rating agencies, according to Fontenay.