|
A solid and increasingly diversified economy, along with prudent budget policies, have led to an upgrade in Arizona's credit rating.
Rating agency Moody's Investors Service said it expects Arizona's economy "will continue to perform positively and that the state will maintain ample reserves" in boosting Arizona's rating to the second highest notch.
Moody's rates states on a 21-grade scale, from C at the low end to Aaa at the top. Arizona now has the second highest rating, at Aa1, up from Aa2 previously. The increase means the state could benefit from slightly lower interest rates when selling bonds or issuing other debt. Arizona has about $1.5 billion in state-issued bonds and similar instruments that have been evaluated by Moody's.
Arizona’s rating has improved two times since the last downgrade in July 2010, near the depths of the recession, Moody's said.
Fifteen states have top Aaa ratings. Arizona joins 17 other states one notch below that. Arizona's most recent upgrade was in 2015.
"Today’s rating boost is further validation that Arizona is going in the right direction — and that smart policies do matter," Gov. Doug Ducey said in a prepared statement.
Ducey cited employment growth, a balanced state budget, debt reductions and a rising balance in the Rainy Day Fund in responding to the Moody's announcement.
Moody's said the favorable rating reflects a combination of economic growth, increases in reserves and the paying down of an "already-low debt burden."
In addition, Arizona has become more diversified in recent years, especially away from construction, and the state's pension liabilities are comparative low, Moody's said.
|
