Washington receives a rating upgrade to Aaa status from Moody’s
OLYMPIA, WA – Moody’s Investor Services has upgraded its rating of the State of Washington’s approximately $19.4 billion in outstanding general obligation bonds, including bonds additionally secured by motor vehicle fuel taxes and toll revenues, to Aaa from Aa1.
“Washington has one of the strongest economies in the country, as well as a business base that has become increasingly diverse. The state also benefits from conservative financial practices and a top-notch debt management team, led by Deputy Treasurer Jason Richter. I’m thrilled that Moody’s has formally recognized the financial strength of the state with its first ever Aaa rating,” State Treasurer Duane Davidson said.
The upgrade reflects a significant increase in financial reserves even as the state increased funding for K-12 education due to a Supreme Court mandate, the continued economic growth driven largely by the technology sector, and consequent diversification of the state’s economy lessening dependence on aircraft manufacturing.
Additional strengths factored into the new higher rating include above-average wealth and income levels, and most notably the state’s strong fiscal governance practices.
“Not only does the Aaa rating reflect highly upon Washington’s credit, it will help ensure that when we finance schools, roads and other important projects, we do so at the lowest possible interest rates,” Treasurer Davidson said.
Looking ahead, the ratings outlook is stable, reflecting the strength of Washington’s economy, its sizable reserves, and manageable long-term liabilities, according to Moody’s.
Although Washington ranks among the top ten most leveraged states across the country, Moody’s expects it will continue to address any budget gaps that may emerge as it has in the past.
“We are proud to have secured a Aaa rating for the state. Professionally, it’s a very exciting achievement, but more importantly, it reflects the incredible success story of Washington’s economy and will help us in our mission to provide the state’s taxpayers with the best possible return on their tax dollars,” Deputy Treasurer Jason Richter said.