(NASHVILLE, TN), December 7, 2011—State Senator Bo Watson (R-Hixson) said today said he is very pleased Moody’s Investor Services has removed the negative outlook placed earlier this year on both Tennessee’s and Hamilton County’s Aaa (Triple-A) General Obligation Bond Rating. The news means that Tennessee and Hamilton County are now rated higher than the United States, which continues to have a negative outlook under Moody’s ratings system.
Moody’s is a leading global rating agency which provides the world’s credit markets with independent credit opinions. Together with Fitch and Standard and Poor’s, Moody’s is one of three nationally recognized statistical rating organizations designated by the U.S. Securities and Exchange Commission. The rating ranges from Aaa, at the high end to a C on the low end, in representing the quality of a bond.
“We have taken a very fiscally prudent path in our state finances,” said Speaker Pro Tempore Watson, who serves on the Senate Finance Committee. “This action demonstrates Tennessee’s finances are managed well. Now the bond agencies are recognizing this fact. I congratulate Governor Haslam, Lt. Governor Ramsey, Commissioner Emkes, Secretary of State Hargett, Comptroller Wilson and Treasurer Lillard for their work in securing this positive change in our ratings.”
The action by Moody’s reverses their August decision to put a negative outlook on Tennessee’s triple-A bond rating due to its indirect linkages to the US government rating. The State Funding Board traveled to New York twice since receiving that news to present additional information to Moody’s in defense of the State’s Aaa rating.
The triple-A rating is the rating agency’s highest bond rating. Bonds rated triple-A offer exceptional financial security to investors. Moody’s indicated the outlook was revised from negative to stable in order to reflect the relatively lower level of risk posed by federal downsizing and U.S. spending cuts in Tennessee.
“I also congratulate our Hamilton County officials for their work in securing this positive change in the county’s ratings outlook,” added Watson. “This speaks well of the management of the county’s finances, as well as the forward movement being made in economic development locally.”
“It is very important that Tennessee practices fiscal restraint as our credit rating is a critical to state and local governments in the issuance of bonds,” added Watson. “We will continue to work to gain the highest ratings available.”