KBRA assigns a long-term rating of AA+ to the State of Connecticut: General Obligation Bonds (2026 Series A); General Obligation Refunding Bonds (2026 Series B); and, Taxable General Obligation Bonds (2026 Series A). KBRA additionally affirms the long-term rating of AA+ 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

• State is projected to complete FY 2026 with a BRF balance exceeding the statutory cap at 18% of general fund appropriations and is positioned to direct surplus resources toward supplemental pension contributions for a seventh consecutive year.
• Strong financial management framework and enhanced statutory fiscal guardrails in place through at least FY 2028 position the State for strong operating results.
• Strong wealth levels with the highest per capita personal income level among all states as of 2025.

Credit Challenges

• Lower relative growth in the economic indicators of population, employment, and gross state product, although there are recent signs of growth in population.
• Unfunded pension liabilities and tax-supported debt burden are high relative to personal income, each more than 3x the respective U.S. average. However, the State borrows for many local purposes and the comparison on a combined state and local basis is more moderate.
• Federal policy changes implemented in the OBBBA will push responsibility for funding a larger share of certain social welfare programs to states over the next several years, which KBRA anticipates will pressure budgetary balance.

Rating Sensitivities

For Upgrade

• Significant improvement in the funded ratios for the State’s pension systems.

For Downgrade

• Structural operating deficits in the general fund.
• Further relaxation of the fiscal guardrails.
• Sustained weakening in the State’s employment base and economic activity.

To access ratings and relevant documents, click here.

Methodology

• Public Finance: U.S. State General Obligation Rating 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: 1014601

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