The recent upgrade in the assessment of state bonds used in the UConn 2000 initiative reflects the strong reputation of UConn and Connecticut’s commitment to higher education. This upgrade will help reduce long-term borrowing costs and generate savings, allowing for continued investment in UConn and the state’s economy.
In a recent announcement, UConn President Radenka Maric, Governor Ned Lamont, and State Treasurer Erick Russell shared the positive news of the upgrades by Fitch Ratings on the state’s UConn General Obligation (GO) bonds. The rating was upgraded from “A+” to “AA-“, indicating improved creditworthiness and stability.
This upgrade comes at a crucial time as the Treasurer’s Office and UConn plan to offer approximately $227 million of bonds for sale in early November. These funds will be used to finance various projects at the University, including the construction of the South Campus residence hall, infrastructure improvements, the new Science 1 building, and renovations to the Gant Science Complex. Additionally, $129.3 million of existing UConn bonds are expected to be refunded at lower interest rates, generating further savings.
Bond ratings are assigned by agencies like Fitch to help investors assess risk when considering purchasing bonds. Stronger bond ratings enable entities like UConn and the State of Connecticut to secure lower interest rates on bonds, reducing long-term borrowing costs. This, in turn, frees up revenue to be allocated towards other initiatives that benefit the state and its residents, including UConn students.
President Maric expressed her satisfaction with Fitch’s recognition of the strong partnership between UConn and the State, as demonstrated by the UConn 2000 program. This program has received unwavering support from the State for over 27 years, leading to increased demand for a UConn education. The rating upgrade by Fitch will further reduce borrowing costs for UConn 2000 and support continued investment in both UConn and the state’s economy.
This is the second time in the last 12 months that UConn-related bonds have been upgraded, indicating ongoing confidence in the financial management and attractiveness of the University and the State of Connecticut. Moody’s Investors Service also upgraded its ratings on other UConn-related bonds in fall 2022, citing the University’s strong fiscal management, institutional reputation, and conscientious financial practices during the COVID pandemic.
Fitch’s announcement highlighted the success of recent state budgetary reforms and Connecticut’s commitment to its higher education system. The strong legal protections on the bonds, supported by the constitutional state priority of higher education and the expectation of continued strong support for the UConn system, were key factors in the rating upgrade.
Governor Lamont emphasized that this credit rating increase is evidence of the state’s fiscal responsibility and the positive impact of measures such as spending caps and a focus on paying down long-term liabilities. He believes that strategic investments in UConn will benefit the business community by ensuring a top-flight workforce and building a brighter future for all of Connecticut.
Overall, the upgrade in bond ratings for the UConn 2000 initiative reflects the strong partnership between UConn and the State of Connecticut, as well as the state’s commitment to higher education. This upgrade will result in reduced borrowing costs, allowing for continued investment in UConn and the state’s economy.
