The State’s Bond Ratings Over the Years

Overview

A bond rating grades the credit worthiness of the state or municipality. The stronger the bond rating, the greater ability for the state or municipality to borrow at lower interest ratings and better deal to finance projects, fund services or service debt. This piece looks at the state’s bond ratings in prior years.

The Rating Agencies

There are three major credit rating agencies that ascertain the contemporary fiscal position of the state: Standard & Poor’s (S&P), Moody’s Investor Service, and Fitch Ratings. Each rating agency assigns their own grades upon analysis of the state or municipalities current fiscal situation and credit worthiness. The illustration below shows the different grades each agency can assign.

Chart created by Prairie State Policy

History of the State’s General Obligation Bond Ratings Since the 1970s

Charts created by Prairie State Policy via data from the Illinois Commission on Government Forecasting and Accountability. The Aa* rating by Moody’s assigned August 1992 is no longer used, but was lower than Aa1.

The charts above illustrates the various grades the rating agencies have assigned to the State of Illinois over the last four decades. A couple of notes when reading these charts:

  • Moody’s was the first credit rating agency to rate the credit-worthiness of the state in 1973; followed by Standard & Poor’s in 1979 and then Fitch Ratings in 1996.
  • The charts do not list the credit rating from the agencies every year. Instead, it provides the years in which there was change in rating made by at least one of the rating agencies, whether it be an upgrade or downgrade from their prior rating.
  • Cells labeled in green illustrate an upgrade in credit rating from the prior rating. Likewise, cells labeled in red illustrate a downgrade in credit rating from the prior rating.
  • While the credit ratings do fluctuate of the years, the state has still for the most part maintained a strong payment capacity when it comes to servicing debt. It has only been in recent years where concerns of the state’s likelihood to fulfill it’s financial obligations as only adequate.

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