KBRA assigns a long-term rating of AAA to the State of Maryland General Obligation Bonds, State and Local Facilities Loan of 2026, First Series Tax-Exempt Bonds (Competitive) and affirms the long-term rating of AAA for the State’s outstanding General Obligation Bonds. The rating Outlook is Stable.
Key Credit Considerations
The rating actions reflect the following key credit considerations:
Credit Positives
- Inherent strength and breadth of the State GO payment pledge
- Established history of conservative budget management and maintenance of prudent reserves through economic cycles.
- Governor has broad executive authority to reduce spending to maintain budget balance.
Credit Challenges
- Economic growth lags that of the Nation.
- Highest reliance on federal employment among the 50 states amid the current federal administration’s focus on shrinking federal employment will be a headwind to economically sensitive tax receipts over the near to medium term.
- Federal policy changes to Medicaid cost-sharing and SNAP administration costs will increase program costs for the State. The full extent of these additional costs is not yet known.
Rating Sensitivities
For Upgrade
- Not applicable at AAA rating level.
For Downgrade
- Deeper than anticipated impact of federal employment and contract cuts resulting in sharp and continuing decline in economic indicators and State revenue performance.
- Significant deterioration in reserves and liquidity to levels no longer consistent with the rating level.
To access ratings and relevant documents, click here.
Methodology
Disclosures
A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be located here.
Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.
About KBRA
Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.
Doc ID: 1015119
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