Moody's Investors Service said it has upgraded to Aa1 from Aa2 the general obligation rating of the Vermont Municipal Bond Bank's 1988 general resolution debt.
Concurrently, Moody's has assigned an Aa1 rating to the VMBB's 2017 bonds, consisting of $30.8 million 2017 Series 1 Bonds and $5.5 million 2017 Series 2 Bonds (green bonds).
The outlook is stable. Moody's said the bank's rating is no longer based on the state's moral obligation pledge but rather on the credit strength of the pool program.
The upgrade to Aa1 reflects the improved underlying credit quality of the pool participants, Moody's said. The rating also reflects the large and diverse portfolio of participants, strong legal covenants and debt structure, and strong management and governance including support from the state of Vermont (Aaa stable).