Tuesday, October 20, 2015

Pennsylvania Outlook Cut to Negative by Moody’s on Stalemate

News
Moody's Investors Service says it has cut Pennsylvania's bond rating one notch from Aa2 to Aa3. This leaves only New Jersey (A1) and Illinois (A3) with lower ratings among U.S. states. The cut comes in response to Pennsylvania's "imbalanced" 2015 state budget and fiscal problems. Moody's cites the use of one-time 'accounting' gimmicks, non-recurring revenues, and slowing economic growth as precursors to further budget deterioration. Deteriorating budgets, largely in plain sight of the public, is not be recognized as national trend just yet. This will change in 2016.

Headline: Pennsylvania Outlook Cut to Negative by Moody’s on Stalemate

The outlook on Pennsylvania’s credit rating was dropped to negative from stable by Moody’s Investors Service, which cited a budget stalemate that has lasted for more than 100 days and led investors to demand higher yields to hold the state’s bonds.


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