A credit rating is an independent assessment of the creditworthiness of an entity, a bond, or any similar borrowing instrument. It measures the probability of the timely repayment of principal and interest of a debt obligation by the issuer. Generally, a higher credit rating leads to a more favorable effect on the marketability of a bond, likely reducing the interest rate and the resulting debt service to the State. Long-term credit rating symbols are generally assigned with “triple A” as the highest and “triple B” (or Baa) as the lowest in investment grade. Anything below triple B is non-investment grade, and is commonly known as a “junk bond.”
April 2014 Downgrade
Standard and Poors downgraded New Hampshire’s bond outlook from stable to negative, but at the same time affirmed the state’s high bond rating.
The firm cited a recent lower court ruling that a hospital tax (MET) generating $185 million in revenue a year was unconstitutional.
Standard & Poors said the amount is significantly higher than the state’s $9 million in savings.
They also noted that the public pension fund has a large unfunded liability.