Moody’s Investors Service Maintains Louisiana’s Aa2 Rating
BATON ROUGE – Today, Moody’s Investors Service assigned an “Aa2” rating to $228.31 million in general obligation (GO) bonds. In addition to affirming the state’s credit rating, the agency changed Louisiana’s outlook from stable to negative.
Governor Bobby Jindal said, “We appreciate Moody's affirming the state’s credit rating, which has come as a result of acting quickly and responsibly when our state has faced revenue problems. In terms of the outlook change, the agencies have noted the variables the state faces because of falling oil prices and an increase in recurring expenditures due to growing refundable tax credits.
“Currently, there are hundreds of millions of dollars in expenditures being paid out through refundable tax credits. These are expenses coming out of the state's budget and going to entities that are above and beyond tax liability. We will work with the Legislature to address this issue head on. We believe this will help protect higher education and health care, while also improving our credit ratings even more.”
Moody’s attributes Louisiana’s Aa2 rating to timely responses to downward revenue projections; a trend of low unemployment relative to the nation; debt policies that have lowered the state's debt ratios over time; and below-average reserves for an energy-reliant state but adequate alternative liquidity.
Today’s overall rating remains unchanged since the last bond issuance and refunding, and means that the state is able to save millions by refunding previous bonds at lower interest rates. Since Governor Jindal took office in 2008, Louisiana has received eight credit rating upgrades among the three major credit-rating agencies. Louisiana's credit ratings are currently the strongest they have been in two decades.