CREDIT RATING ENHANCEMENT COMMITTEE
On August 1st, 2016, the Credit Rating Enhancement Committee (CREC) released its most recent report for fiscal year 2016 to the governor and legislative leadership as outlined by Idaho Code 67-1225. The CREC is under no obligation to distribute the report further but has in the past posted the report on the State Treasurer’s website.
Contained in the most recent report is an explanation of the Idaho Housing and Finance Association’s (IHFA) participation in the U.S. Securities and Exchange Commission’s (SEC) Municipalities Continuing Disclosure Cooperation Initiative (MCDC Initiative). In an article from the Bond Buyer on September 21, 2016, 96% of the underwriting market by volume has participated in this initiative. At the time of the report, the IHFA had not yet received a determination from the SEC, but since then, the issue has been resolved.
The CREC has a limited scope and has been able to efficiently fulfill its duties without needing to meet in recent years. According to Idaho Code, if a meeting is desired or needed it can be called by the chairman (Treasurer Crane) or by a board member, if the majority are in agreement. The CREC does not mandatorily convene.
It is the duty of the committee to advise the governor and the legislature regarding policies and action that enhance and preserve the state’s credit rating and maintain the future availability of low cost capital financing. To carry out this function, the committee provides a report to the governor, speaker of the house of representatives, and the president pro tempore of the senate. When Treasurer Crane came into office, Idaho did not have a shadow (underlying) rating. However, Treasurer Crane requested and obtained this rating from Moody’s Rating Services and Idaho was issued a Aa3 rating. Since the establishment of the Credit Rating Enhancement Committee, Idaho has had two significant credit rating increases yielding a rating of Aa1/Aa+, just one step below Aaa (AAA). Despite the submission of several press releases, no media coverage was given to these credit enhancements.
The results the CREC has achieved, indicate that the current process is working and it has successfully improved the State of Idaho’s credit rating.