LOS ANGELES — Fitch Ratings Friday revised its outlook to negative from stable on Washington, while affirming the state’s AA-plus general obligation bond rating.
The action comes in connection with $1.5 billion in upcoming bond sales.
Fitch analysts said that the revision reflects the challenges faced by the state in addressing a sizeable budget gap that developed after the adoption of the current biennial budget.
“Maintenance of the AA-plus rating will be contingent upon enactment of sustainable budgeting measures that provide an adequate cushion against future revenue underperformance,” Fitch wrote.
The bonds are to be sold through competitive bid, with $960 million in refunding bonds on Tuesday and the new money bonds on Feb. 28.
The state hopes for present-value savings of more than 5% when it sells the refunding bonds, a spokesman said.
Standard & Poor’s Friday affirmed its AA-plus rating and stable outlook. Moody’s Investors Service rates Washington Aa1 but had not issued a report on the upcoming bond sale as of Friday afternoon.