Missouri Taxpayers to Save $22 Million Through Bond Refinancing, State’s AAA Credit Rating Reaffirmed

AUGUST 4, 2020

Jefferson City — Today, the state of Missouri competitively sold $173 million to refinance outstanding bonds, saving Missouri taxpayers approximately $22 million. The true interest cost of the new bonds was 0.38 percent.  

"I’m very proud of our public servants who continue working hard to maintain Missouri’s AAA credit rating," Governor Mike Parson said. “We always want to do what’s best for our citizens, and we remain committed to finding solutions that will save Missouri taxpayers’ hard earned dollars.”

According to Moody’s Investor’s Service, “The outlook for the state of Missouri is stable, reflecting the state’s history of stable available fund balances, strong financial management practices, and below average debt and pension burden. Missouri’s strong expenditure flexibility has enabled the state to proactively respond to the revenue declines caused by the coronavirus.”

S&P Global Ratings affirmed its AAA long-term rating on Missouri’s general obligation bonds outstanding, and its AA+ rating on the state’s appropriation-backed debt outstanding. The outlook on all ratings is stable.

S&P stated that its AAA rating is based on Missouri’s “very strong budget management framework, demonstrated by the executive branch’s high degree of expenditure flexibility to maintain budget balance; steady budget performance and revenue growth; and an overall diverse economic base, stable wealth and income levels, and recently steady employment growth.”

Additionally, Fitch Ratings affirmed Missouri’s Issuer Default Rating (IDR) and general obligation bond ratings at AAA and rated the state AA+ on both a long-term rating and unenhanced long-term rating for Missouri Board of Public Buildings Special Obligation Refunding Bonds, Series B 2020.

Fitch said Missouri’s AAA IDR “reflects the state’s low long-term liability burden, historically conservative financial operations and broad, diverse economy.”  Fitch added that “Missouri remains well-positioned to withstand future economic downturns, given its very strong gap-closing capacity due to strong executive control over revenues and spending, and a demonstrated willingness to take timely budgetary action.”

"This is great news for the people of Missouri,” Governor Parson said. “We have faced some major challenges over the past several months, but this is another positive sign that Missouri is on the right track.”

The Board of Public Buildings met today to discuss the purchase, sale, and issuance of the Special Obligation Refunding Bonds, Series B 2020. Governor Parson, Lieutenant Governor Mike Kehoe, and Attorney General Eric Schmitt were in attendance.