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Georgia Secures AAA Bond Rating

Governor Brian Kemp announced Friday that Georgia again secured the highest ratings of AAA with a stable outlook from each of the three main credit rating agencies

Governor Brian Kemp announced Friday that Georgia again secured the highest ratings of AAA with a stable outlook from each of the three main credit rating agencies: FitchRatings, Moody’s Investors Service, and S&P Global Ratings. Of the states that issue general obligation bonds, only nine currently meet this standard. Georgia’s upcoming general obligation bond sale will fund over $1.1 billion in capital projects. The Peach State’s AAA ratings will enable the State to sell its bonds at the lowest possible interest costs when it takes bids for its new issue of general obligation bonds next week. The credit rating agencies’ individual ratings are AAA, Aaa and AAA, respectively, which are the highest ratings available and indicative of sound fiscal management.

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“This announcement is great news for Georgia, demonstrating our ongoing commitment to fiscal balance and ensuring we can meet our present and future obligations, even as we combat the COVID-19 pandemic’s significant effects on the health of Georgians and the state’s economy. Building on the efforts of past governors and legislatures, I am proud that Georgia’s economy and fiscal health continue to show resilience in these unprecedented times,” said Governor Kemp. “This recognition is why the State’s bonds are highly attractive to investors, and as a result, enables the state to save taxpayers millions of dollars each year with low interest rates for borrowing. As the top state for business for seven consecutive years, this rating highlights the strength of our workforce and stability of our economy, and it shows companies that Georgia is a well-managed, reliable state in which to invest. We will continue to invest in our priorities and budget conservatively while protecting the lives – and livelihoods – of all Georgians.”

Bond Rating Agency Report Excerpts


“Georgia’s ‘AAA’ Long-term Issuer Default Rating (IDR) reflects the state’s conservative debt management, proven willingness and ability to maintain fiscal balance and a broad-based growth-oriented economy that supports revenue growth over time. The state proactively addressed weakened revenues during the great recession through steep spending cuts and draws from its revenue shortfall reserve [RSR, or Georgia’s “rainy day fund”]. In the recently ended expansion, Georgia maintained a conservative approach to fiscal management by limiting spending growth and rebuilding the RSR balance, which Fitch views as strengthening its resilience as it now confronts budgetary challenges emerging from the coronavirus pandemic. … Georgia’s long-term liability burden is low, and overall debt management is conservative. While the state issues bonds regularly for capital needs, amortization of principal is rapid. Additionally, Georgia fully funds its actuarially determined contributions (ADCs) for pensions, and the net pension liability (NPL) is a low burden on resources.”

Moody’s Investors Service:

“Georgia’s Aaa general obligation rating reflects moderate debt and robust fiscal management and governance. A traditionally strong economy mitigates below-average resident income and vulnerabilities that manifested in past recessions, such as a large decline in economically sensitive revenue. … We do not see any material immediate credit risks for Georgia. … The stable outlook recognizes that Georgia’s strong governance and fiscal management and high level of reserves will enable the state to sufficiently manage the economic downturn..”

S&P Global Ratings:

“Consistent with its strong management practices, the state has taken proactive measures to align its budget to the changing economic landscape and does not rely on extraordinary federal aid or significant one-time measures for budgetary balance in fiscal 2021. … In our opinion, Georgia’s economy should be among the more resilient given its level of employment diversification that mirrors the nation…. Over the past decade, Georgia has benefited from an expanding economy, strong demographic trends, and improvement in its core urban, metropolitan Atlanta. Before the COVID-19 outbreak, most service sectors of the state’s economy were flourishing. Absent any future outbreaks or pull-back in economic activity, the state should be relatively well positioned for future growth. The state’s debt burden, in our view, is moderate and should remain so…. Georgia maintains its commitment to adequately funding its pension liabilities and in recent years has started to prefund its other postemployment benefit (OPEB) obligations.”

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