|FOR IMMEDIATE RELEASE
WEDNESDAY, APRIL 15, 2009
CONTACT: LOLA POTTER
NASHVILLE — Governor Phil Bredesen today announced that all three bond rating agencies have confirmed their confidence in Tennessee’s financial management by maintaining the state’s bond rating and giving Tennessee a ‘stable’ credit outlook. The action comes after recent reviews of the administration’s efforts to maintain short and long-term stability during the downturn in revenues that began in January 2008.
“This is a very solid indication that we are on the right track, especially in light of recent actions by ratings agencies to downgrade credit ratings and outlooks in several other states,” Bredesen said. “The confirmation of our rating – and the stable outlook attached – by all three agencies is a vote of confidence in our financial stability during a historically difficult economic time.”
Both Fitch Ratings and Standard & Poor’s held firm their rating of AA+ with a credit outlook of stable. Moody’s Investor Service also maintained its rating at Aa1 with an outlook of stable. The action comes after Moody’s in February expressed a negative outlook for the broad sector of all U.S. states.
“We must continue to look ahead to the time when federal funds are no longer available so that our budget in 2011 falls within the expected tax revenues at that time,” said Finance and Administration Commissioner Dave Goetz. “The Recovery and Reinvestment Act allows us to make much more thoughtful, deliberative budget decisions over this period, but tough decisions still must be made.”
When Bredesen took office in 2003, Standard & Poor's rating for the state was AA; by August 2006, S&P upgraded the rating to AA+ based on the state's continually improving financial position.
Before Bredesen took office, the state’s rating from Moody’s was downgraded to Aa2 with a negative credit outlook. In less than two years, the outlook was upgraded to stable; by 2007, Moody’s upgraded the state’s rating to Aa1.