Maryland Retains Two AAA Credit Ratings After Moody’s Downgrade

Maryland's credit ratings have come under mixed assessments from the three major rating agencies ahead of a significant bond sale. While Moody's downgraded Maryland's issuer and General Obligation bond ratings from Aaa to Aa1, citing long-term fiscal challenges and economic underperformance, both Fitch Ratings and Standard & Poor's reaffirmed Maryland's AAA rating with a stable outlook, reflecting confidence in the state's fiscal management and ability to maintain structural balance. State officials, including Treasurer Dereck Davis, expressed strong criticism of Moody's downgrade, suggesting political motivations and highlighting Maryland's fiscal resilience despite federal budget cuts and economic headwinds linked to policies under former President Trump. The ratings affect the interest rates Maryland will pay on upcoming bond sales, including a nearly $1.7 billion sale for infrastructure projects, with Fitch and S&P's AAA ratings helping to mitigate the impact of Moody's downgrade. Moody's also downgraded Maryland's Department of Transportation bonds and revised their outlook to stable, but acknowledged the state's strong debt service coverage and transportation fund revenues. Overall, these divergent ratings underscore ongoing fiscal challenges but affirm Maryland's creditworthiness amid complex economic conditions related to its close ties to the federal government.