RATING OUTLOOK
The outlook for Colorado's long-term ratings is stable. The state has generally conservative financial practices and a history of timely appropriations for the lease payments securing the vast majority of its debt. The economy's fundamentals remain strong and a better than average recovery from the current slowdown is likely. Debt levels are expected to remain moderate.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
- A significant and sustained increase in financial reserves.
- Voter actions that enhance the state's fiscal health and flexibility.
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
- A sustained weakening of GAAP-basis fund balances or a significant weakening in liquidity.
- Voter actions that further constrain the state's fiscal flexibility.
- A protracted weakening of the state's generally strong economic fundamentals.
LEGAL SECURITY
The Series 2020 CDOT COPs, along with prior series of CDOT COPs, are payable from lease payments to be made by CDOT for use of the leased assets, including its headquarters facilities in Denver, Pueblo, Greeley and Aurora. Lease payments are not subject to appropriation by the legislature but are subject to allocation by the STC as part of its approval of CDOT's budget.
USE OF PROCEEDS
Proceeds of the 2020 CDOT COPs will be used to refund outstanding CDOT COPs for debt service savings.
PROFILE
Colorado is the 21st largest state by population, at 5.8 million. Its state gross domestic product, $390.3 billion, is the 16th largest. Income levels are above average--the state's per capita personal income is equal to 108.3% of the US level and its poverty level is among the lowest in the nation.
METHODOLOGY
The principal methodology used in this rating was Lease, Appropriation, Moral Obligation and Comparable Debt of US State and Local Governments published in July 2018 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1102364. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
The rating has been disclosed to the rated entity or its designated agent (s) and issued with no amendment resulting from that disclosure.
This rating is solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.
Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.
Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569.
The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.
Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.
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Kenneth Kurtz Lead Analyst State Ratings Moody's Investors Service, Inc. One Front Street Suite 1900 San Francisco 94111 US JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Marcia Van Wagner Additional Contact State Ratings JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653
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