Moody's Investors Service today upgraded to A1 from A its rating on general obligation bonds issued by Massachusetts.
The rating action comes as the state plans to issue $200 million of GO bonds later this week. The rating affects $8.95 billion in state GOs, and as much as $12.5 billion in overall securities.
Moody's also gave a MIG-1 rating on $240 million in general obligation notes, and an A1 rating for a taxable issue scheduled for sale by the Massachusetts Government Land Bank. Both issues will go to market on Nov. 16.
Massachusetts is currently rated A-plus by both Fitch Investors Service and Standard & Poor's Corp.
Moody's attributed the upgrade to the state's "spending discipline and adherence to reasonable revenue assumptions."
In a press release, state Treasurer Joseph D. Malone said the upgrade. is "further evidence that we've improved fiscal management within the commonwealth,"
In 1991, Gov. William F. Weld took office, inheriting a Ban rating from Moody's and a BBB rating from Standard & Poor's Corp, the lowest state credit ratings in the nation. At the time, Fitch Investors Service rated the state an A.
Moody's stated today that in the face of economic hardship and stress from the last recession, the state has maintained a "diverse sources of strength and high personal income," while "restoring fiscal control."
But the rating company also cited potential problems. Moody's said the state's heavy debt load is one of the highest in the country, adding that Massachusetts also faces "substantial fixed costs," such as pension contributions and transit subsidies.
