PHOENIX - Although drought conditions in Oregon are bad for credit overall, and especially in agricultural communities, official drought declarations by Gov. Kate Brown are a positive development, Moody's Investors Service said Friday.
Brown extended drought declarations to three additional counties July 27, meaning that drought conditions now officially exist in 23 of Oregon's 36 counties. The eastern part of the state has been the hardest hit.
"Along with water usage tools intended to mitigate supply shortages, state and federal drought declarations provide access to additional conservation project funding and economic disaster loans for large water users," Moody's said. "The water rights management tools and small amount of additional funding available to water suppliers throughout the affected counties will sufficiently mitigate any credit risk that would otherwise arise from low water levels. Unless the drought worsens in the near-term, we expect credit qualities of issuers in these counties to remain effectively unchanged by low water conditions."
While drought declarations are not unusual in Oregon, the 23 counties now under that status are the highest since 1992, Moody's said. The agency released a similar report on neighboring Washington in May.
