Fitch rates N.H. bonds ‘stable’


Credit rating firm Fitch Ratings has given $125 million of New Hampshire bonds an “AA” rating, with a stable outlook.The general obligation bonds consist of $50 million in 2009 Series B bonds and $75 million in 2009 Series C bonds. The bonds went on sale Dec. 15.In addition, Fitch also affirmed the “AA” rating and a stable outlook on $768 million of outstanding general obligation bonds.“New Hampshire's economy has been strong and resilient when compared to surrounding states coming into the current economic downturn, and strong growth is expected to return once the national economy recovers,” said the ratings agency. “Debt levels are low, amortization is rapid, and net tax-supported debt is entirely general obligation. Pension funding ratios have declined dramatically over the past ten years.”Fitch analysts also gave New Hampshire’s employment stability high marks.“The state has steadily added jobs since August 2003 and did not lose jobs year-over-year in the current downturn until December 2008. Although unemployment levels have increased significantly over the past year, they remain well below the national average of 6.8 percent in October 2009. Per capita personal income is 108 percent of the nation's, ranking New Hampshire ninth among the states,” they said.Despite the relative stable economy of the Granite State, Fitch analysts said that the state’s strengths “are offset partly by the state's dependence on a variety of volatile taxes, which have not performed well in the current economic environment.” Looking closer at New Hampshire contentious budget situation, Fitch said, “Major tax revenues severely underperformed estimates…. If the state does not prevail, an equivalent amount will be withdrawn from the rainy day fund, bringing its balance to just over $9 million.“The enacted budget for the fiscal 2010-2011 biennium assumes minimal growth in base revenues, and uses a combination of revenue enhancements, expenditure reductions, reserves and one-shots to achieve balance,” said Fitch. The ratings firm did provide analysis that painted a glimmer of hope that the recession is beginning to loosen its impact on the New Hampshire.“Revenues are starting to show signs of stabilizing. While revenues through the first quarter were down 0.7 percent year-over-year and were 6.2 percent below plan, revenues through November are now up 1.7 percent year-over-year and 5 percent below plan,” said Fitch. – CINDY KIBBE/NEW HAMPSHIRE BUSINESS REVIEW
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