Oklahoma Downgraded to AA by S&P

S&P Global Ratings said it lowered its rating on the state of Oklahoma's general obligation bonds one notch to AA from AA-plus.

At the same time, it lowered its rating on the state's appropriation debt to AA-minus from AA. The AA-minus rating reflects S&P's view of Oklahoma's general creditworthiness and the annual appropriation risks. The outlook is stable.

S&P also assigned its AA-minus rating, with a stable outlook, to the Oklahoma Capitol Improvement Authority's series 2017B (Capitol Repair Project) state facilities revenue bonds, issued for Oklahoma.

"The downgrade reflects our view that persistently weak revenue collections--leading to a declared revenues failure for the remainder of fiscal 2017--have further compounded the state's challenge to achieve structural balance in fiscal 2018," said S&P credit analyst Oscar Padilla. "While the revenue failure alone, in our view, is nominal relative to previous revenue failures, collectively the state's financial position has deteriorated to a point that further precludes the state from building up reserves in subsequent fiscal years, and as such, we believe that, relative to a year ago, the state is more vulnerable to broad regional or national economic weakness."

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