CONNECTICUT $147.7 MILLION G.O.S RATED 'AA+', REMAIN ON FITCHALERT -- FITCH FINANCIAL WIRE --
CONNECTICUT $147.7 MILLION G.O.S RATED 'AA+', REMAIN ON FITCHALERT
-- FITCH FINANCIAL WIRE --
NEW YORK, Nov. 6 /PRNewswire/ -- The State of Connecticut's $147.7 million general obligation bonds expected this month are rated 'AA+' by Fitch. The bonds will be in two series. Series B capital appreciation (college savings plan) bonds will be in the range of $75-100 million, due Dec. 15, 1996-2011, in amounts to be determined. They are expected by negotiation on Nov. 8 through a syndicate led by Merrill Lynch & Co. and Smith Barney, Harris Upham & Co., Inc. Series C, current interest bonds, are expected by negotiation through a syndicate led by Dillon, Read & Co., Inc., on Nov. 18, in an amount ranging upward from $47.7 million, depending on the amount of college savings bonds marketed. They will mature on Nov. 15, 1992-2004 and will include funds to refund $43.75 million outstanding general obligation bonds.
General obligations of Connecticut are rated 'AA+', including the rating assigned to the new bonds. The rating remains on FitchAlert to express the concern over a legislative movement to repeal the newly enacted personal income tax. Such a repeal is widely expected to be vetoed by the governor and it is uncertain whether a veto could be overridden. It is unknown now what plan would be offered to replace the income tax. General obligation ratings will be lowered if an override in conjunction with an inadequate financial plan should happen. The extent of the lowering will depend upon the features of any such plan. Otherwise, credit prospects will center on the economy and the realization of the present plan.
Net tax supported debt is $7.1 billion, or $2,175 per capita, and 8.5 percent of personal income, well above average. It is still too early to assess financial results of the year to date due to the changes in the revenue system.
/CONTACT: Claire G. Cohen of Fitch, 212-908-0552/ CO: State of Connecticut ST: Connecticut IN: SU: RTG JT -- NY091 -- 1908 11/06/91 16:57 EST