The Office of Treasurer Erick Russell

The Year in Review

During Fiscal Year 2023, the Debt Management Division actively managed the State’s $26.0 billion debt portfolio. Significant accomplishments included:

  • New Money Bonds - A total of $1.93 billion of new money bonds were issued to continue funding of 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 $528.2 million of refunding bonds for the General Obligation program that will provide aggregate debt service savings of $45.0 million over the remaining life of the bonds. The Division also issued $313.5 million of refunding bonds for the Special Tax Obligation (Transportation) program that will provide aggregate debt service savings of $24.0 million over the remaining life of the bonds refunded.
  • Credit Ratings – During the year, Connecticut continued to build on its fiscal health including the generation of large budget surpluses, additional deposits to the Budget Reserve Fund, and significant additional contributions to the State’s two major pension systems. In May 2023, Treasurer Russell and the Office of Policy and Management’s Secretary Beckham and staff met with the four major bond rating agencies through video conference calls. In recognition of the State’s continued financial improvement, Kroll Bond Ratings upgraded the State’s credit rating from “AA” to “AA+” on the State’s General Obligation bonds as well as other related bonding programs in May 2023.This upgrade followed S&P Global’s rating upgrade of the State’s credit rating from “A+” to “AA-” in November 2022.
  • Inaugural Investor Conference - Bringing to fruition a plan that was stalled during the pandemic, the Division developed and launched the State’s Inaugural Connecticut Investor Conference in May 2023 to spotlight opportunities for bond investment in the State. This successful day-long event, hosted by Governor Lamont and Treasurer Russell, included presentations from many State agency and industry leaders and brought together legislators, investors, rating agencies and other decision-makers in the areas of infrastructure investment, municipal bonding and public finance. Nearly 300 people from across the country attended the event, which was held in Hartford, CT.
  • Industry Leadership - Continuing its market leadership, Connecticut sold its fourth issue of “Social Bonds” in December 2022. These four Social Bond issues, totaling $1.071 billion, were self-labeled and were sold consistent with the International Capital Markets Association’s Social Bond Principles. The proceeds will finance the State’s school construction grant program, which is a socially progressive program as it provides significantly higher reimbursement rates to more needy communities.
  • General Obligation Bond Sales – The Division’s first General Obligation bond sale of the fiscal year occurred in December 2022 with a $650 million new money offering including $250 million of Social Bonds. This sale was significant as it received the highest amount of retail orders ever recorded - $2.0 billion of retail orders received during a one-day retail order period following the credit rating upgrade from “A+” to “AA-” by S&P Global. The Division’s second General Obligation sale occurred in May 2023 with an offering of $350 million of new money taxable bonds and $100 million of new money tax-exempt bonds.
  • Transportation Bonding Program – In November 2022, the Division managed the issuance of $830 million of new money Special Tax Obligation bonds to fund new and ongoing transportation infrastructure. The bond sale provided total funding of $841 million for statewide transportation infrastructure investments. Throughout the year, the Division continued to consult with the State’s Department of Transportation and the Office of Policy and Management on bonding matters including various funding sources and alternative financing strategies related to the transportation bonding program.
  • University of Connecticut – The Division worked in conjunction with the University of Connecticut to offer a $52.5 million University of Connecticut Special Obligation Student Fee Revenue refunding bonds that will provide aggregate debt service savings of $2.7 million over the remaining life of the bonds refunded.
  • State Revolving Fund (SRF) (Clean Water and Drinking Water Fund) - The Division worked closely with the State’s Department of Energy and Environmental Protection and the Department of Public Health to successfully commit low-cost funding for program participants throughout the State. The Division worked with DEEP to develop a short-term, limited additional subsidy for strategically targeted Clean Water Fund Construction Projects in Distressed Communities Policy which provides forgivable loans from the Clean Water Fund.
  • City of Hartford Refunding – The Division worked collaboratively and successfully with the City of Hartford to refund six series of outstanding City of Hartford general obligation bonds. The City and the State entered into a contract assistance agreement in 2018 whereby the State is obligated to pay the debt service on certain outstanding City of Hartford bonds. The issuance of $124.9 million City of Hartford refunding bonds in April 2023 will provide aggregate contract assistance payment savings to the State of $13.9 million over the remaining life of the bonds refunded.
  • Quasi-Public Agencies – Frequent interfaces with the State’s quasi-public agencies continued as the Division worked with several agencies on debt issuance and refunding that require Treasurer approval and State disclosure. During fiscal year 2023, this included five series for CHFA totaling $725 million and one series for CHESLA totaling $30 million. In addition, the Division worked closely with the Connecticut Airport Authority on a bond refunding and a transfer of the resources of the Bradley Enterprise Fund from the State.
  • Staffing and Vendor Searches - The Division was active in enhancing staffing and systems during the year. In response to the retirements of several members within the Accounting Group, three experienced professionals were hired to fill these important functions and one professional was promoted. Also, the Division finalized approach plans for two firms selected to provide new debt management computer systems after receiving approval from the State’s IT Capital Investment Committee. In addition, the Investment Policies for both the Special Tax Obligation Bond program and the State Revolving Fund Bond program were updated.