DE Bond Rating Remains AAA in Spite of COVID Challenges


The State of Delaware has once again received the highest possible AAA rating from three of the nation’s top rating services, confirming the State’s stable economic outlook for the coming year. The latest round of rating reviews from Fitch, Moody’s and S&P Global Ratings precede the upcoming competitive bid bond sale, intended to fund the State’s ongoing capital program as well as re-funding previous bonds for debt service savings. The sale is scheduled to be held on April 14, 2021.

The rating is assigned based on criteria that include trends in the state’s economy, financial performance and management, overall debt load, and long-term costs. The highest rating, Triple-A, is granted to states that are best able to meet debt obligations during periods of recession or fiscal stress. The higher a state’s credit rating, the lower its cost to repay bonds.

“I want to thank State employees and the General Assembly,” said Governor John Carney. “Our commitment to responsibly managing the state’s spending has provided the financial resilience needed for Delaware to weather the COVID emergency. The continuing strong support of our President and Congressional delegation combined with the resiliency of all Delawareans and our business community will ensure we emerge from this pandemic stronger than ever.”

All three rating reports note the importance of the state’s conservative budget practices, the maintenance of financial reserves, and a proactive approach to tracking and forecasting revenues and expenditures throughout the year. Fitch states that Delaware has “exceptional financial resilience from strong financial management,” which has allowed the state to weather the current COVID-19 pandemic while keeping a stable economic outlook.

S&P notes that “The state continues to see business growth despite the pandemic, including Barclays expanding its U.S. headquarters presence, Goldman Sachs adding a new consumer banking facility, Amazon completing four new facilities, and Incyte (a biopharmaceutical company) adding 400 more jobs.”

Moody’s reports that “Lower business costs and cost of living relative to neighboring states could continue to attract new residents as certain economic sectors have the potential to expand.”

“Thanks to a lot of hard work and the forethought of Governor Carney and his financial team, Delaware is positioned very well,” Treasurer Colleen Davis said. “Strong fiscal controls combined with my office’s handling of cash and investments instill continued confidence that allows the State to maintain its Triple-A bond rating.”

“Delaware’s Triple-A rating continues to save taxpayers millions of dollars through lower interest and financing costs,” stated Finance Secretary Rick Geisenberger. “As state and local governments around the nation wrestle with the fiscal strain of this pandemic, the re-affirmation of Delaware’s bond ratings is a testament to the State’s long-term commitment to economic and financial sustainability.”

Delaware’s Strong Fiscal Management Again Earns Triple-A Bond Rating

WILMINGTON, Del. – As Delaware officials prepare to issue $300 million of General Obligation Bonds later this month, the State has again received the highest possible bond ratings.  One of only a handful of states granted Triple-A status from each of the four major bond rating agencies, January’s ratings from Fitch Ratings, Moody’s Investor Services, S&P Global and Kroll Bond Rating Agency (KBRA) all cited Delaware’s long history of proactive fiscal management and recent efforts to boost reserves.

The agencies noted the successful efforts of Governor John Carney and the Delaware General Assembly to bolster reserves by creating a new Budget Stabilization Fund that has a current balance of $126 million with S&P stating that “we believe the state can maintain better credit characteristics than the U.S. in a stress scenario.”  

“Over the last three years, we have climbed out of a $400 million budget deficit to create a $200 million dollar surplus,” said Governor John Carney. “These are funds that will ensure Delaware has the flexibility to continue making improvements to our schools, our local economy, and the overall health of our state.”

The ratings agencies cited Delaware’s improving economy including the State’s growing banking, health care, and incorporations industries, as well as the acceleration of investment activity at the Port of Wilmington, the STAR Campus at the University of Delaware, and logistics facilities in Newport and Delaware City. 

Moody’s stated that “Delaware has exhibited strong budget management throughout this extended period of national economic expansion. Its conservative budgeting practices helped to rapidly rebuild its financial resilience after the Great Recession and to maintain strong balances and financial cushion.”

KBRA’s rating noted Delaware’s “strong financial position and liquidity and a diverse economy anchored by financial services, chemicals and related industries, the healthcare sector and higher education.”   Fitch stated that Delaware “has exceptional financial resilience and institutionalized protections are designed to ensure surplus operations.”

Ratings agencies assign status based on criteria that includes trends in that state’s economy, its government’s financial performance and management, debt load, long-term costs, and political structure. States whose status indicates that they have the ability to meet debt obligations during periods of recession or fiscal stress, or are able to adapt quickly to such conditions, are granted the highest ratings. Additionally, the higher a state’s credit rating, the lower their cost to repay the bonds.

“Delaware’s triple-A ratings are the result of the sustained hard work of all three branches of State government, all of whom share the same goal, to operate our State as efficiently as possible while ensuring the financial security of current and future generations of taxpayers,” said Finance Secretary Rick Geisenberger.


Delaware Holds Successful Bond Sale

Finance Secretary Rick Geisenberger announced today that Delaware successfully sold $225 million in triple-A-rated general obligation bonds in Thursday’s competitive bond sale.

Earlier this month, Delaware’s triple-A rating was re-affirmed by Moody’s Investors Service, Fitch Ratings, and Standard & Poor’s Rating Services. This rating is the highest mark that a state can achieve, and translates to reduced interest costs for Delaware. Today’s sale represented one of the lowest cost of funds in the last 15 years, pricing at very tight spreads to the prevailing AAA index – reflecting strong investor demand for the State’s bonds.

“The success of this week’s bond sale is a validation of the State’s long-term fiscal discipline and prudent financial management even during challenging budget environments,” said Secretary Geisenberger. “The resulting funds will enable us to continue to invest in vital capital projects and infrastructure improvements around the state.”

Some of the projects funded with the proceeds of the bonds include a new elementary school in the Laurel School District, renovations in the Red Clay, Lake Forest, Cape Henlopen, Smyrna, Caesar Rodney and Brandywine school districts as well as public library construction and renovations at Garfield Park, Lewes, Delmar, Selbyville, Harrington and Duck Creek.

Delaware’s true interest cost on this loan was 2.80%. The state received five bids; awarding Morgan Stanley &Co., LLC as the bidder offering the lowest cost of capital.


Successful State Bond Sale Saves Taxpayers Over $8M

Wilmington, DE – Finance Secretary Thomas J. Cook announced today that Delaware successfully sold $236 million in triple-A-rated general obligation bonds in Tuesday’s annual bond sale, effectively netting a savings of over $8 million for Delaware taxpayers.

With triple-A ratings recently re-affirmed by Moody’s Investors Service, Fitch Ratings, and Standard & Poor’s Rating Services, Delaware was able to obtain some of the best pricing relative to the triple-A index in recent history, even in a volatile market. “Credit quality matters and translates into reduced interest costs to taxpayers,” said Cook. “In this case, the triple-A rating saved Delaware taxpayers $5.8 million when compared to double-A rates.”

Of the $236 million of bonds sold, $36 million sold as Series C represents a refinancing at lower rates, saving taxpayers more than an additional $3 million.

“It is our responsibility to ensure we are using taxpayer dollars efficiently and maximizing the return on our investments,” said Governor Jack Markell. “Our triple-A rating, and the benefits that come with it, are the result of the fiscal discipline and prudent financial management that have become Delaware’s hallmark.”

Delaware’s combined cost of capital on this loan was 2.32%. “While not the lowest ever, it is lower relative to other high quality issuers that have been in the market recently,” said Cook. The state received seven bids; awarding Morgan Stanley &Co., LLC as the highest bidder on Series A, J.P. Morgan Securities LLC on Series B, and Bank of America Merrill Lynch on Series C.

The remaining $200 million, Series A and B, represents various capital projects – including over $100 million in school construction projects, improvements to the Veteran’s Home, National Guard readiness facilities, the Port of Wilmington, libraries around the state, and the rehabilitation of park and wildlife areas.


Leslie A. Poland
Public Information Officer
Delaware Department of Finance
(302) 577-8522