Louisiana GOs, IDR upgraded to AA by Fitch
Bloomberg News
Louisiana’s general obligation and issuer default ratings were upgraded to AA from AA-minus by Fitch Ratings, which cited successful implementation of
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The outlook was revised to stable from positive.
Fitch also upgraded the state’s appropriations-backed bonds to AA-minus from A-plus.
In addition to the revenue policy changes, Fitch cited continued solid budgetary performance and preservation of fiscal flexibility. The rating also stems from “the state’s broad, although somewhat concentrated and slow-growing economic base, and a moderately low long-term liability burden.”
Fitch expects revenues to grow at a similar rate to inflation over time.
Louisiana’s financial operations are strong as the state prioritizes preserving its robust gap-closing capacity through economic downturns, with very high operating reserves and budgetary flexibility, Fitch said. “Slow economic growth, the planned partial rollback of the 2024 sales tax increase and the reallocation of certain revenue from the general fund to transportation projects could constrain long-term revenue growth,” Fitch said.
In the fiscal year that ended June 30,
Neither Gov. Jeff Landry nor State Treasurer John Fleming immediately responded to a request for a comment.
Louisiana’s GO and issuer ratings carry a Aa2 from Moody’s Ratings, AA from S&P Global Ratings and AA from KBRA, all with stable outlooks.
