Maryland's treasurer expressed confidence Tuesday the state's AAA credit rating would not change as a result of Standard & Poor's historic downgrade of the federal government's rating.
Maryland has maintained the top rating from the three major ratings agencies. Officials in the state treasurer's office said they were advised Tuesday morning by an analyst with Standard and Poor's that the agency would take "no action" on the state's rating in the immediate future.
But it remained unclear whether the state ultimately would see an effect on its own credit rating.
Patti Konrad, director of debt management for the state treasurer's office, said Standard & Poor's would wait until Congress details specific spending reductions mandated by the debt ceiling deal approved by Washington last week, and then assess how those cuts might effect Maryland.
"It is uncharted for them and, to some degree, for us," Konrad said.
State Treasurer Nancy K. Kopp issued a statement on Maryland's credit rating after Standard & Poor's released a report Monday night that said the agency could assign credit ratings to some state and local governments that are higher than the federal government's rating.
"We are pleased to see that Standard & Poor's is looking at the states individually, and we believe that Maryland's prudent fiscal management will be viewed positively by the rating agencies as they review the states," Kopp said.
States and municipalities across the country that have close ties with the federal government are jittery that the U.S. credit downgrade will trickle down to local governments.
Owing to its proximity to Washington, Maryland is home to a disproportionate share of federal employees, agencies and contractors.
Kopp's office described investor demand for general obligation bonds sold on July 27 as "very strong," as demonstrated by the fact that the true interest cost was "among the lowest since 1988."
The state sold $71.7 million in bonds to retail investors and $418.3 million to Banc of America Merrill Lynch, the winner among seven bidders, officials said.
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