SPRINGFIELD, Ill. (WTVO) — Moody’s Investor Service upgraded Illinois bonds to an ‘A’ category, the second major credit agency to return Illinois credit rating to a stable ‘A3’ rating.
Moody’s upgrade was the eighth in two years following eight prior downgrades. The A3 rating means Moody’s sees Illinois finances as having a “stable outlook.”
S&P Global Ratings announced a rating upgrade to A- for Illinois’ General Obligation bonds last month, its third upgrade of Illinois’ bonds since July 2021. Fitch Ratings upgraded Illinois’ bonds by two notches last spring, the first Fitch upgrade for Illinois’ General Obligation bonds since June 2000. Illinois received two upgrades from Moody’s Investor Service in two separate actions in April 2022 and June 2021.
Moody’s said improved governance in Illinois was a key consideration in the action, with the state “displaying improved management of its budget by making conservative revenue assumptions and applying surplus revenue towards the payment of debt and growth in reserves.”
“This credit upgrade, our second one this year, is the result of the steps we’ve taken in Illinois to put ourselves on firm fiscal footing. We have balanced our budget, paid our bills on time, cleared out decades of debt, made extra pension payments, and saved billions for a rainy day,” said Gov. J.B. Pritzker. “There’s more work to be done, but it’s clear we have undone decades of damage and ushered a new era of fiscal responsibility in Illinois. I look forward to building on this record by working with the General Assembly to pass the state’s fifth straight balanced budget later this spring.”
Between 2015 and 2017, under Gov. Bruce Rauner, the State of Illinois suffered eight credit rating downgrades and sat at the top of many analysts’ lists of the worst-managed states in the nation. At its worst, Illinois’ bill backlog hit nearly $17 billion.