Tag Archives: credit

TN bonds sell cheap (2.16%) with credit upgrade

News release from state comptroller’s office
The State of Tennessee has just completed the very successful sale of approximately $366 million of general obligation (GO) bonds. This is Tennessee’s first bond offering since receiving an upgrade of its bond rating to AAA from S&P in May 2016.

Tennessee’s top-rated credit sparked demand from investors while keeping interest rates extremely low.

The debt offering was sold in three series of bonds. The proceeds will be used to fund new capital projects and refinance currently outstanding bonds. The refinancing will save Tennessee taxpayers $22.8 million dollars over the next 15 years.

The combined true interest cost for the bonds was 2.16%. Records indicate that this is the lowest interest cost for a negotiated sale in the state’s history and is a direct result of Tennessee’s highly regarded credit and favorable market conditions.

“It gives me great pleasure to announce yet another history-making Tennessee bond sale,” said Comptroller Justin P. Wilson. “The Tennessee General Assembly and Governor Haslam have worked hard to place Tennessee in an incredibly strong financial position. Tennesseans are benefiting from the lowest interest rates in state history. It’s good to be a triple, triple-A state.”

TN gets AAA bond rating from all three national rating agencies

News release from state comptroller’s office
The State of Tennessee now holds the highest bond ratings issued by all three major credit rating agencies. Tennessee’s triple triple-A status reflects the extremely strong confidence the rating agencies have in the State’s capacity to meet its financial commitments.

The State has been informed that it is now rated AAA by Standard & Poor’s Ratings Services. S&P conducted a mid-year review and upgraded Tennessee’s rating from AA+ to AAA. The other two rating agencies, Moody’s Investors Services and Fitch Ratings, have provided Tennessee with their highest ratings of Aaa and AAA, respectively, since 2010.

S&P’s report cited Tennessee’s strengthening economy, growing reserves, positive year-to-date performance, and continuous sound management of its long-term liabilities.

Tennessee’s preliminary unemployment rate for April 2016 was 4.3%, which is below the U.S. preliminary rate of 5%. Additionally, the Tennessee General Assembly recently appropriated an additional $100 million to the state’s rainy day fund, increasing the fiscal year 2017 balance to $668 million.

These first-class ratings will translate into lower interest rates when the state borrows money, and may result in substantial savings for taxpayers. Continue reading

Senators reject candidate credit score disclosure

An effort to require Tennessee candidates for public office to release their credit scores wound up with a zero rating in the Senate State and Local Government Committee, reports the Times-Free Press.

The committee voted 9-0 against the bill (SB1452), sponsored by Sen. Paul Bailey, R-Sparta.

Bailey argued voters should know something about a candidate’s financial stability, but fellow senators raised a number of objections including someone whose credit ratings may be adversely impacted due to identity theft.

“You’ve been most gracious in the defeat of this important legislation,” Bailey told colleagues following the vote.

Note: In contrast, the bill has made its way successfully through House committees and subcommittees and is scheduled for a floor vote on March 24 under sponsorship of Rep. Cameron Sexton, R-Crossville. Previous post HERE.

TN among 31 states settling lawsuit with credit reporting agencies

By Julie Carr Smyth, Associated Press
COLUMBUS, Ohio — Three nationwide credit reporting agencies have agreed to fix disputed information on credit reports more quickly, wait longer before adding potentially damaging information on medical debt and scrutinize certain data furnished by outside entities, according to a multistate settlement announced Wednesday.

Ohio Attorney General Mike DeWine announced the pact that Equifax, Experian and TransUnion struck with attorneys general in 31 states. It calls for the agencies to pay a combined $6 million to participating states and to adjust a host of business practices over the next three years.

“It’s a good day for all consumers in the United States,” said DeWine, a Republican. He spearheaded the investigation that led to the deal after reading a 2012 investigation by The Columbus (Ohio) Dispatch about consumers denied car loans, house loans and jobs because of mistakes by reporting agencies.

Other attorneys general praised the deal. (Note: Tennessee gets $157,000 out of the settlement, according to Attorney General Herbert Slatery’s praising press release, HERE.)
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TN may keep AAA credit rating — even if federal government gets a downgrade

Tennessee may hold onto its top-notch credit rating even if the federal government gets a downgrade, state officials said Friday after meeting with Wall Street rating agencies, reports The Tennessean.

Comptroller Justin Wilson said the firms that rate government debt this week told state officials specifically that Tennessee would not see its creditworthiness reduced automatically if the United States government’s were taken down, a shift from past conversations.

That means Tennessee could maintain its AAA rating from Fitch Ratings and Moody’s Investors Services and AA-plus from Standard & Poor’s.

Tennessee’s credit rating helps determine how much interest state and local governments must pay when they borrow money to fund projects such as new schools and roads. State officials have worked for decades to improve the state’s rating and finally reached the top tier in 2010.

Gov. Bill Haslam said during a conference call from New York, where state officials are making their annual visit to the ratings agencies, that Wall Street appeared to be more concerned that cuts in federal spending could put a drag on Tennessee’s economy.

Audit: Rockwood Man Bought $32,726 in Guns, Cameras and Clothes With City Credit Card

News release from comptroller’s office:
Investigators from the Comptroller’s office have discovered that a former Rockwood city coordinator used a city credit card and a city store charge card to purchase at least $32,725 in property and services for his personal benefit over a period of about three years.
These personal purchases included nearly $12,000 in guns, ammunition and firearm accessories, more than $7,000 in clothing, nearly $6,000 for camera equipment, more than $4,000 in online college tuition and nearly $4,000 for other miscellaneous personal items.
An investigative audit released today details how the former coordinator, Tom Pierce, used the city credit card to purchase at least 11 guns, including a tactical shot gun, a .308 rifle, a .44 caliber revolver, and two 9 mm pistols. These guns were registered to Pierce personally, not on behalf of the city. He also used the city credit card to purchase holsters, rifle scopes, tactical sights and ammunition.
Additionally, Pierce used the city credit card to also purchase clothing for his personal benefit at a total cost of $7,263. The clothing purchased includes polo shirts, cargo shorts, underwear, socks, women’s jeans, suit separates and running shoes. Additionally, the report details how Pierce used the city credit card to purchase premium cameras and photography equipment costing at least $5,697, including two Olympus cameras priced at more than $1,200 each. Although the city owned various inexpensive digital cameras used by employees, both the current mayor and the former mayor told the Comptroller’s investigators that they had no knowledge Pierce had purchased premium camera equipment at the city’s expense.
According to the Comptroller’s report, Pierce used the city credit card to charge business management courses totaling $4,190 from an online college and also used the city credit card to purchase other personal items with a total value of $3,675, which included protein powder, testosterone booster, digital music, books and movies.
Investigators determined that all of these charges were paid for with city funds. Both the current mayor and the former mayor told investigators that they had no knowledge Pierce had purchased the personal items at the city’s expense, either. They also indicated that they would not have given permission for the city to pay for such expenses.
“It is unacceptable for people in positions of public trust to abuse that trust at the expense of local taxpayers,” Comptroller Justin P. Wilson said. “I commend our investigators for helping to bring these issues to light. I also want to thank the district attorney and his staff for the work they have done on this case.”
This month, the Roane County Grand Jury returned a seven-count indictment against Pierce for theft, fraudulent use of a credit card and official misconduct.
To view the Comptroller’s report online, go to: http://www.comptroller.tn.gov/ia/
To view photos of some of the personal items purchased with city funds, go to: http://www.comptroller.tn.gov/repository/NR/20130227RockwoodReleasePictures.pdf

Moody’s Rates TN as Stable

NASHVILLE, Tenn. (AP) — Moody’s Investors Service has revised Tennessee’s credit outlook from negative to stable.
Moody’s in October retained its top debt rating for Tennessee but gave the state the negative outlook following an earlier decision to do the same with the federal government’s debt.
The ratings agency said in a statement Wednesday that the outlooks of Tennessee and South Carolina were improved because they have a relatively low financial and economic exposure to reductions in federal spending.
Moody’s said it kept the outlooks for Maryland, New Mexico and Virginia at negative.
Tennessee also has a top rating from Fitch Ratings, while Standard and Poor’s has the state at one notch below its best grade.

State Employees Offered Credit Protection After Foulup

NASHVILLE, Tenn. (AP) — The state of Tennessee is offering credit protection to nearly 2,000 employees who canceled their health or dental insurance after officials mailed out their personal information in October.
Each mailing included a certificate containing the information of the recipient and three other letters aimed at other members of the plan. State officials say 1,770 certificates were mailed to the wrong address.
Each included name, address, employee ID number, healthcare insurance coverage dates and Social Security number, which was not identified as such but appeared at the bottom of each certificate.
The state is offering affected employees a year’s credit protection through Lifelock free for one year. Each has been mailed a letter about the program and has until Dec. 28 to sign up.

Two Agencies Keep TN Bonds at AAA, One at AA+

(Note: Expands and replaces earlier post)
NASHVILLE, Tenn. (AP) — Rating agencies have decided not to downgrade Tennessee’s debt after the state submitted a detailed game plan for how each agency would respond to deep federal spending cuts.
Republican Gov. Bill Haslam on Tuesday cited a “proven history of fiscal responsibility” in announcing that Moody’s Investors Service and Fitch Ratings have reissued their top ratings to Tennessee and that the state will remain one notch below Standard and Poor’s best grade.
The only change is Moody’s switching Tennessee to a negative outlook, following a decision in August to do the same with the federal government’s debt.
Haslam last month led a delegation of state official to meetings with all three ratings agencies in New York in which he presented plans for coping with federal spending cuts as deep as 30 percent.
The governor told reporters after a speech to a Republican group at a Nashville law firm on Tuesday that Tennessee showed the ratings agencies a willingness to make difficult spending decisions if they are required.
“Their concern is not about delivery of services,” he said. “What it’s about (is): Will people who loan money to the state get paid back? And to do that, they want to be hear if you’re willing to make cuts if you have to.”
“That’s reassuring to them,” he said.
The ratings decisions were reported earlier by The Tennessean and The Memphis Daily News based on an email to lawmakers from an aide to the state comptroller and a Twitter post by state Senate Speaker Ron Ramsey, R-Blountville, on Monday afternoon.
“These ratings are proof that a united Republican government determined to cut government and promote economic growth works,” Ramsey said in a statement Tuesday. “It’s that simple.”
Finance Commissioner Mark Emkes earlier led a delegation of state officials to meetings with Moody’s and Fitch after initial rumblings in August that Tennessee could face a downgrade because of it relies on the federal government for about 40 percent of its budget.
Upon his return, the former CEO of tire maker Bridgestone Americas ordered each state agency to lay out plans for how it would cut 15 percent of federal aid, and another for reducing those funds by an additional 15 percent.
The state in September submitted its 153-page plan detailing how the each agency would deal with an across-the-board reduction in federal money.
“They were used to seeing contingency planning and risk assessment from corporations, so I think they were favorably impressed that the state government had looked at this and gone through the process,” Emkes said after a second round of meetings with the ratings agencies.
Under the worst-case scenario, Tennessee would have to cut $4.5 billion out of the $30.8 billion spending plan and lay off more than 5,100 state employees.
About half of those cuts would be made at TennCare, the state’s expanded Medicaid program serving 1.2 million people.
Former Democratic Gov. Phil Bredesen cut 170,000 adults from TennCare and reduced benefits to thousands more to bring spending under control during his two terms as governor that ended in January. TennCare costs dropped by about $1 billion between 2005 and 2009, but still make up about a quarter of the state budget.
Tennessee’s approach doesn’t appear to have been replicated by other states making their cases to keep or improve their debt ratings.
Note: News release below

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Democratic Chair Bashes ‘Bond Rating Dog and Pony Show’

News release from Tennessee Democratic Party:
NASHVILLE — State Democratic Party Chairman Chip Forrester urged Tennessee’s top Republicans to consider a jobs plan to keep the state’s fiscal house in order.
“The surest way to strengthen our state’s fiscal house is to put 300,000 Tennesseans back to work. If Ron Ramsey and Governor Bill Haslam put half the effort they expend wooing corporate campaign donations into a common sense jobs plan, Tennessee would get there a lot faster.”
Forrester pressed Gov. Bill Haslam and Senate Speaker Ron Ramsey for action on the state’s job crisis in statement Wednesday following the Republicans’ meeting with Wall Street bond rating agencies. At 9.8 percent, Tennessee’s unemployment rate remains well beyond the national average.
“This bond rating dog and pony show for Wall Street executives looks obnoxious to the 300,000 Tennesseans who are struggling to find work and provide for their families,” Forrester said. “They’d like to see a day when the numbers we brag about are Tennessee’s low unemployment rate and high economic output.
“There’s no doubt Wall Street was impressed with Governor Haslam’s contingency plan to fire 5,000 workers and eliminate crucial services that keep families healthy, children educated and the disabled properly cared for. However, Tennesseans who’ve seen this extreme plan are not so enthusiastic,” Chip Forrester said. “Haslam’s slash-and-burn budget would send our state into an even more severe economic tailspin and prompt a societal crisis that would diminish the quality of life for every Tennessean.”
This summer Gov. Haslam instructed state department heads to plan for 30 percent budget cuts to be enacted if Tennessee receives less federal funding.