A little more than a week after Illinois’ credit rating was upgraded by Moody’s for the first time in more than two decades, S&P Global Ratings has now followed suit, upgrading the state’s rating for the first time in nearly 25 years.
According to Illinois Gov. J.B. Pritzker’s office, the ratings upgrade on the state’s bonds is the first since 1997, with analysts citing “improved liquidity” and an “improving economic condition” in their report.
“A well-known proverb states, a journey of a thousand miles begins with a single step. Throughout my administration we’ve remained steadfast in our goal to return Illinois to fiscal stability. That has meant making responsible decisions step by step, day by day, working closely with our partners in state government,” Pritzker said in a statement. “These responsible decisions are paying dividends, as evidenced by today’s upgrade from S&P, last week’s upgrade from Moody’s and our outlook rise to positive by Fitch. My administration has worked diligently to make real progress, the rating agencies are acknowledging our progress and we remain committed to further strengthening Illinois’ fiscal standing.”
According to Pritzker’s office, S&P upgraded Illinois’ rating on general obligation bonds from BBB- to BBB with a stable outlook. “Build Illinois” bonds were upgraded to BBB+ from BBB.
Illinois Comptroller Susana Mendoza says that the upgrades in credit ratings will benefit taxpayers in a variety of ways, enabling the state to borrow money for infrastructure and other improvements at lower rates.
“S&P’s upgrade of the state’s credit rating is further evidence that Illinois is moving in the right direction,” Mendoza said in a statement. “Upgrades are good news because they mean lower costs for taxpayers on the bonds that we use to build roads, bridges, schools and other projects.”
Mendoza says that the state has trimmed down its bill backlog from $16.7 billion to $2.9 billion in the last few years, and intends to continue working to cut down the number of bills it owes.
“As the state comptroller, my priority continues to be managing the state’s bill backlog and providing evidence to the credit rating agencies that Illinois is an excellent investment and is on a path to financial stability and certainty.”
In late June, Moody’s upgraded Illinois’ bond rating for the first time since June 1998, with the service citing “material improvements” in the state’s handling of its finances, coupled with “constrained use of federal aid” while still increasing pension payments and keeping the state’s bill backlog in check.
Moody’s upgraded Illinois’ rating on General Obligation bonds from Baa3 with a stable outlook to Baa2 with a stable outlook, according to the press release.
Moody’s had previously downgraded Illinois’ rating on General Obligation bonds on three different occasions, most recently knocking the rating down to Baa3 due to a budget impasse that took place under the administration of former Gov. Bruce Rauner.