The Office of Treasurer Erick Russell

The Year in Review

During Fiscal Year 2025, the Debt Management Division actively managed the state’s $25.4 billion debt portfolio. Significant accomplishments included:

  • New Money Bonds - A total of $2.6 billion of new money bonds were issued to continue funding the state’s capital programs including local school construction grants, economic development initiatives, transportation infrastructure, improvements at the state universities and colleges, and clean water and drinking water grants. These projects help bolster the local economy and improve the lives of all Connecticut citizens.
  • Refunding Bonds - The division issued a total of $949.5 million in refunding bonds for the GO program that will provide aggregate debt service savings of $78.0 million over the remaining life of the bonds. The division also issued $375.3 million of refunding bonds for the STO program that will provide net savings of $6.8 million over the remaining life of the bonds refunded. In addition, the state worked collaboratively with the City of Hartford to issue $116.6 million in Special Obligation Refunding Bonds (state contract assistance), which refinanced most of the city’s remaining GO Bonds on which the state pays the debt service. This refinancing will provide aggregate debt service savings to the state of $7.2 million over the remaining life of the bonds.
  • Credit Ratings – The division maintained an open dialogue with the rating agencies to emphasize that the state continues to bolster its fiscal health including budget surpluses, deposits to the Budget Reserve Fund (BRF), and additional contributions to the state’s two major pension systems. For its Fall 2024 and Spring 2025 GO Bond sales, the state maintained its ratings from the four credit rating services as follows: Moody’s Aa3 with a positive outlook; Fitch AA- with a positive outlook; S&P AA- with a stable outlook; and Kroll AA+ with a stable outlook.
  • Investor Relations – The division teamed up with its bond underwriters, the Governor, Treasurer, and Office of Policy and Management (OPM) to hold a successful investor roadshow in support of the Spring 2025 GO Bond sale, with stops in Boston, Hartford, and New York City. The state’s largest investors were in attendance and had the opportunity to listen to a presentation by the State and ask questions. Despite significant volatility in the municipal bond market leading up to the bond sale, the state attracted more than $9 billion in total orders from both retail and institutional investors, exceeding by nearly seven times the amount of bonds offered.
  • GO Bond Sales – The division’s first GO Bond sale of the fiscal year was a $214.2 million competitive, on-line sale in August 2024. The offering was well received by the market, with a total of 12 underwriters submitting bids. The winning bid came in at a total interest cost of 2.92%, outpacing projections, with the cover (second place) bid just two basis points greater. Proceeds from the sale were used to refinance prior, higher interest rate bonds, yielding a savings of $23.4 million to taxpayers over ten years. In October 2024, the division sold a second issue of GO Bonds consisting of $936.7 million of tax-exempt bonds, including $240.0 million sold as Social Bonds dedicated to school construction, and $136.7 million in bonds issued to refund prior debt, saving the state $15.1 million over ten years. In May 2025, the division sold a third issue of GO Bonds consisting of $500.0 million tax-exempt and $300.0 million taxable bonds, leveraging the investor roadshow noted above. In addition, $598.6 million of tax-exempt bonds were issued to refinance prior debt, saving approximately $39.6 million over 10 years.
  • Transportation Bonding Program – In December 2024, the division managed the issuance of $1.0 billion of new money STO Bonds to fund new and ongoing transportation infrastructure and $375.3 million to refund prior debt achieving aggregate net savings of $6.8 million over the remaining life of the bonds. In addition, the division utilized newly passed legislation that allowed the use of the excess in the Special Transportation Fund (STF) to retire debt. In recent years, the amount held in reserve in the STF has grown significantly. Legislation proposed by Treasurer Russell and the administration sought to use funds over 18% of STF operating expenses to pay down long-term debt. This provision was adopted by the legislature in the 2024 legislative session as a one-time mechanism for Fiscal Year 2025 and was made permanent in the 2025 legislative session. In Fiscal Year 2025, STF excess was used to retire $536 million of outstanding STO Bonds. The State retired an additional $34 million of STO Bonds from THE YEAR IN REVIEW PORTAL.CT.GOV/OTT - EMAIL: STATE.TREASURER@CT.GOV - PHONE: 860 702 3000 - TOLL FREE: 800 618 3404 33 DIVISION OPERATIONS bond reserves that were no longer needed due to the early payoffs. The $570 million in total of retired bonds yields a savings to taxpayers of approximately $726 million over the next ten years. Utilizing excess reserves to remove debt from the balance sheet improves the long-term health of the STF by lowering future principal and interest payments on borrowing, freeing up those funds for transportation projects.
  • New Bond Indenture - In the fall of 2024, the division completed the first STO Bond sale under a new indenture. The new indenture replaced a 40-year-old document, and updated and modernized the legal terms between Connecticut and its bondholders. As a result of these modernization efforts, which included eliminating the requirement to fund a debt service reserve fund, the state expects to reduce future outstanding STO Bonds by a projected $887 million by Fiscal Year 2032.
  • State Revolving Fund (SRF) (Clean Water and Drinking Water Fund) - The division worked closely with the state’s Department of Energy and Environmental Protection (DEEP) and the Department of Public Health to successfully commit low-cost funding for program participants throughout the state. The division collaborated with DEEP to develop a short-term, limited additional subsidy for strategically targeted clean water fund construction projects in distressed communities which provide forgivable loans from the Clean Water Fund.
  • Quasi-Public Agencies – Frequent interfaces with the state’s quasi-public agencies continued as the division worked with several agencies on debt issuances that require state disclosure and approval by the Treasurer. During Fiscal Year 2025, this included one series for Connecticut Innovations totaling $21.0 million, five series of bonds for CHFA totaling $1.3 billion, and two series for CHESLA totaling $65.6 million.
  • Staffing and Vendor Searches - The division hired an executive secretary to work alongside the Assistant Treasurer. The Debt Management Division is now fully staffed.