Fitch Rates Delaware’s $225MM GO Bonds ‘AAA’; Outlook Stable

If you want to read some really nice things about Delaware and its governance, read on…

NEW YORK, Dec 18, 2008 (BUSINESS WIRE) — Fitch Ratings assigns an ‘AAA’ rating to the State of Delaware’s $225 million general obligation (GO) bonds, series 2009. Bonds will be offered to retail buyers beginning Jan. 12, 2009 with the remainder to be sold competitively Jan. 14. Fitch also affirms the ‘AAA’ rating on the state’s approximately $1.4 billion outstanding GO bonds. The Rating Outlook is Stable.
Delaware’s premier credit standing centers on its considerable economic and financial resources, as well as institutionalized protections designed to ensure surplus operations. The state’s economy, diversified through deliberate policies that created a climate attractive to banking and related business services as well as pharmaceuticals, has slowed like much of the nation. There is no state sales tax, aiding in the state’s comparative cost advantage. An above-average debt burden is tempered by a rapid rate of amortization, with 78% of GO bonds due in 10 years.
Delaware is a historically wealthy state. Its personal income per capita ranks 14th in the U.S. at 104% of the national average, although recent personal income performance has been weak. Unemployment levels are well below the U.S. average (83% of the U.S. rate at 5.4% in October 2008), although, like the nation, the rate is markedly increased from a year ago (up from 3.5% in October 2007). The pace of employment growth, which had slowed as compared to the U.S. in 2006, dropped to just 0.2% in 2007 compared to 1.1% growth for the U.S. Employment was flat in October 2008 compared to a year earlier, compared to a 0.9% decline for the nation. The state’s December forecast projects employment down 1.4% for fiscal 2009 and another 1.1% for fiscal 2010.

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