Fitch Ratings upgraded Connecticut to AA from AA-minus Wednesday, giving the Constitution State two upgrades in two days ahead of a $1.8 billion bond deal.
Connecticut's governor and treasurer celebrated the upgrades, along with a strong performance by the state's pension fund, in a press conference on Wednesday.
"Moody's
The Connecticut Retirement Plans and Trust Funds reported returns of 10.14% for fiscal year 2025, State Treasurer Erick Russell announced.
The state assumes a CRPTF return of 6.9% while budgeting. This outperformance will save the state roughly $700 to $800 million in its pension liabilities annually, according to Lamont.
Connecticut's pension funds also benefited from the fiscal guardrails, a set of financial constraints adopted in 2018 after years of fiscal challenges. The guardrails automatically allocate state budget surpluses to the rainy day fund and pension funds.
In fiscal 2025, Connecticut made $933 million of excess contributions to the CRPTF. Between excess contributions and investment earnings, the fund's assets increased by $5.9 billion.
The fiscal guardrails were central to both Fitch and Moody's upgrades.
"The upgrade reflects Fitch's expectation that Connecticut will maintain policies that foster structural balance while revenues grow in line with national inflation and expenditures grow consistent with statutory budget guardrails," Fitch's analysts wrote in the
"This is the result of sound fiscal management, a growing trust in Connecticut by businesses and residents, which is reflected in our improved economic statistics, and a historic run in the stock market," Lamont said in a statement. "If we continue the progress we have made, the state's pension debt, largely accumulated from 1939 to 2011, will be fully funded within a generation. This is the legacy we are leaving our children and grandchildren, and one we should all be proud of."
In addition to Connecticut's GOs, Fitch also upgraded the state's Capital Region Development Authority and the University of Connecticut to AA from AA-minus, and upgraded the Connecticut Higher Education Supplemental Loan Authority's state-supported revenue bonds to AA-minus from A-plus.
Russell announced that Connecticut will sell $1.815 billion of GOs in the week of Sept. 22, 2025. The deal will include $800 million of new money tax-exempt bonds, $300 million of new money taxables, and $715 million of refunding bonds.
Ahead of the deal KBRA affirmed its AA-plus rating of Connecticut GOs and S&P Global Ratings affirmed its AA-minus rating.
"We're not out of the woods," Lamont said. "I know there's a certain sense, maybe 'Yippee, we're done, we can get back to business as usual.' We're still below average."
Connecticut still had roughly $35.1 billion of
Many within the state are pushing to
"When I talk to these companies, they say 'I'm going to take a second look at Connecticut,'" Lamont said.
In the previous year, the state's pensions had achieved 11.5% returns, Russell said.
The state has been pivoting its asset allocation toward private markets, a move employed by other pension funds such as New York City's. Connecticut adopted a five-year plan to phase in more private investments in 2022, Russell said.
Connecticut is considering one big investment move: buying a
Russell said other pension funds, both private and public, have invested in athletics and specifically in women's basketball. The details of a potential deal are not set in stone, Russell and Lamont said, but could involve other investments such as using state bond funds.
Any deal "would be in the benefit of pensioners," Russell said. "That is my priority as treasurer, as you see from the returns that we have demonstrated over the last few years."
