New Hampshire is set to issue $83 million of general obligation bonds on Tuesday.
The Granite State issues one GO deal a year. The rocky market won't deter the state from selling its bonds, and the team is hoping the state's credit profile will keep investors just as interested as always.
New Hampshire's deals are "always well-received," said State Treasurer Monica Mezzapelle.
"We've been very fortunate. We always have an interest in our bonds," Mezzapelle said. "We hope to have the same kind of reception, [and that] we get enough bids to select, obviously, the best offer. So that's really our hope. I think we can do that."
The bonds will be issued competitively on Tuesday. PRAG is the municipal advisor for the deal and Troutman Pepper Locke is the counsel.
The general obligation deal includes a $60 million Series 2026A, which features maturities from 2027 through 2046. Series 2026B, $23.08 million of bonds which are planned to mature from 2027 through 2036, will refund a 2016 issuance. Market conditions will determine whether the second series is issued, Mezzapelle said. The two series will be auctioned separately.
The deal is rated Aa1 by Moody's Ratings and AA-plus by Fitch Ratings and S&P Global Ratings.
New Hampshire and Alaska are the only states in the country without a broad based sales or income tax, according to Eric Kim, head of the Fitch U.S. states rating team, which means their revenue streams can be more volatile and they respond differently to economic downturns.
Chandra Ghosal, an analyst at Moody's, noted New Hampshire's high-income population, solid employment metrics, and industrial diversity.
"it's not been immune [from] macroeconomic factors that have kind of taken some of the wind out of its sails recently with respect to economic growth," Ghosal said, "whether it's a tariff-related impact or tourism coming from Canada."
Kim noted that the state's reserves are down a bit from their American Rescue Plan Act-fueled highs, but still well above pre-pandemic levels.
"They've got some challenges, like all states do, but in a relatively good place, from a credit perspective," Kim said.
The state has enjoyed positive in-migration, Mezzapelle said — rare for a New England state.
Mezzapelle stressed New Hampshire's flexibility as a core credit strength.
"In times when perhaps things don't go as expected, the governor and the legislature have the ability to adjust [revenue and spending] projections," Mezzapelle said. "We're able to respond pretty quickly to any conditions that might change over time.
Kim said the state's low long-term liability burden helps its flexibility.
"We believe in a low debt burden for our taxpayers, so that obviously strengthens our credit position," Mezzapelle said. "Right now, our pension plan is getting stronger, with 71% funded."
The state has a biennial budget, so lawmakers are considering how its fiscal 2026-2027 budget has held up.
While writing the budget, Mezzapelle said, lawmakers "obviously had to consider the fact that revenues will normalize after having an outperformance over the last few years." Some taxes have fallen short of the projections, but the budget has mostly held up, she said.
"One thing that they noted to us in our conversation is that they implemented a hiring freeze and some other cost saving measures," Ghosal said.
The state has seen "softening on the revenue front in recent years," Ghosal said, "partly because of tax cuts that were implemented and partly because of just a softening business tax environment, but we do still expect structural balance from the state."
New Hampshire is also facing inflation-driven costs that have cropped up nationwide, Ghosal said, for expenses like health insurance, personnel, or materials for capital projects.
New Hampshire is facing a few "unique spending pressures," Kim said.
The state recently widened the eligibility for its school voucher program. The program has since grown at a higher rate than what New Hampshire budgeted for, Kim said, and its structure allows for automatic increases in the coming years.
Ghosal said that the voucher program is likely to be more of a challenge for local school districts than for the state budget.
"Our expectation is that the legislature is going to potentially look at that program and see what the growth is in the next session," Kim said. "There may be some limits or different parameters put around the program, but right now, it's a program that we think is important to keep an eye on in terms of potential growth and spending pressure there."
The other pressure is related to the Youth Development Center, a juvenile detention facility for which the state has been sued. Lawmakers set up a settlement fund, but will need to allocate significant additional funding to meet the number of outstanding claims, Kim said.
Next budget season, New Hampshire will also need to address a 2025 State Supreme Court decision that found it wasn't adequately funding its schools. The court left it up to the state to determine adequate funding, and lawmakers are still working to find a new definition, Kim said.
Ghosal said the decision is unlikely to "change the trajectory of the state budget."
Mezzapelle highlighted revenue-raising measures in the budget that have outperformed expectations.
"For example, a tax amnesty program was implemented this year. That program actually generated really favorable outcomes," Mezzapelle said. "Only $5 million was budgeted, and it generated over $100 million in revenue."
