Standard & Poor's dropped its outlook on Vermont's AA-plus general obligation rating to stable from positive Nov. 10, citing lagging economic growth.
"The outlook revision reflects Vermont's slower-than-average economic recovery, which continues to pressure the budget, in our view," said S&P credit analyst Robin Prunty.
S&P's rating of the state reflects four primary factors. First, the state has a diversifying economic base characterized by above-average income levels and low unemployment rates, even as the economic growth rate is below average.
Second, the state has strong financial and budget management policies. These have contributed to consistent reserve and liquidity levels over time.
Third, the state has a well-defined debt affordability and capital planning process. These have kept the debt burden at a modest level and have a rapid amortization.
Fourth, Vermont has significant pension and other postemployment benefits.
In addition to S&P's rating, Vermont's GO bonds carry the ratings of AAA from Fitch Ratings and Aaa from Moody's Investors Service.
Vermont plans to sell $111 million in GO bonds in the week of Nov. 17.
