ข่าวประชาสัมพันธ์การเงิน/หลักทรัพย์

Colorado BEST COPs Series 2018L-M Assigned ‘AA-‘ Rating; Other Ratings Affirmed

          DALLAS (S&P Global Ratings) July 10, 2018--S&P Global Ratings assigned its 'AA-' long-term rating to the state of Colorado's $166.7 million Building Excellent Schools Today (BEST) certificates of participation (COPs), series 2018L and 2018M. At the same time, we have affirmed our 'AA' issuer credit rating (ICR) on the state, our 'AA-' long-term rating on its lease debt and COPs outstanding, and our 'A+' long-term rating on the state's moral obligation debt outstanding. The outlook on all ratings is stable.
          "The 'AA' ICR on Colorado reflects what we consider a broad and diverse state economy that continues to exhibit better-than-average income, employment, and population trends," said S&P Global Ratings credit analyst Ladunni Okolo, "and it also reflects the state's weak pension funded ratio, as well as a history of funding less than the annual pension actuarially determined contribution (ADC) under a statutory funding formula, although recent pension reforms may improve pension funding." Other factor include our view of the state's:
          - History of making midyear budget corrections, when necessary, during weak economic periods, and its close quarterly budget monitoring and forecasting; and
          - Low debt and moderate other postemployment benefit (OPEB) levels.
          We have applied our "Issue Credit Ratings Linked To U.S. Public Finance Obligors' Creditworthiness" criteria (published Jan. 25, 2018, on RatingsDirect) to analyze the issued 2018 COPs and outstanding COPs. The rating reflects Colorado's appropriation pledge, which we currently rate one notch lower than the state's ICR. We considered the affordability and likelihood of the lease payment, which are reflected in the rating and in our view of the Colorado's general creditworthiness. In our view, the lease features and terms are standard with no unusual risks regarding timely payment of debt. The 2018L and 2018M BEST COPs are payable from legally available monies of the state that are annually appropriated to the public school assistance fund as base rental payments under the lease purchase agreement and are on parity with outstanding COPs under the master indenture. We understand that the proceeds of the COPs will be used to pay the costs of refunding and defeasing outstanding certificates and to pay the costs of issuance. 
          "The stable outlook on all ratings reflects our view that Colorado has adopted a sustainable plan to address its weak pension funded ratio, which is well below similarly rated states following a long trend of annually contributing less than its ADC to its retirement system," added Ms. Okolo. We expect Colorado's economic growth to remain strong and state reserves to remain at what we consider good levels. It is our view that, given the state's strong finances and economic growth, it currently has the capacity to address its liabilities through adopted measures without significant budget pressures as contributions increase. However, the state will need to proactively and adequately fund its pensions on an actuarial basis using prudent assumptions, including calling special sessions when necessary, to avert deterioration of unfunded liabilities over time and continued long-term pressures on the pension system and the state's rating. Should implementation of the changes fail to prevent further decline of the state's combined pension funded ratios or lead to a decline of its finances during our two-year outlook horizon, we could lower our rating on the state.
          Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating action can be found on S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column.