Bangkok--14 Mar--Standard & Poor's
Standard & Poor's Ratings Services lowered its long-term rating and underlying rating (SPUR) to 'AA' from 'AA+' on Nevada's general obligation debt. Standard & Poor's also lowered its long-term rating and SPUR to 'AA-' from 'AA' on the state's appropriation-backed certificates of participation. The outlook on all ratings is stable.
"The rating action reflects our view of the state's severe economic cyclicality, which, as demonstrated in recent years, can limit its growth and growth prospects given a relatively heavy dependence on discretionary consumer spending," said Standard & Poor's credit analyst Gabriel Petek.
The 'AA' rating reflects our view of the state's:
- Demonstrated willingness to address its budget gap with timely and, when it deems them necessary, austere cuts in general fund spending and redirection of certain revenues to the general fund from other state functions;
- Consistently good financial liquidity on both an intra- and-interyear basis;
- Good constitutional protections, which require budget balance and give tax preference to debt service;
- Positive ending reserve position and favorable reserve management, even following three fiscal years in a recessionary context; and
- Low total debt relative to the state's economy and a low debt burden as a portion of the state's budget.
The stable outlook reflects our view that the state's financial management is strong, as demonstrated by its continued willingness to make timely and proactive budget amendments as it deems necessary to maintain budgetary balance.
RELATED CRITERIA AND RESEARCH
USPF Criteria: State Ratings Methodology, Jan. 3, 2011
USPF Criteria: Appropriation-Backed Obligations, June 13, 2007
Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095,
[email protected]
Analyst Contacts:
Gabriel Petek, CFA, San Francisco (1) 415-371-5042
Paul Dyson, San Francisco (1) 415-371-5079