Immediate threats to Pennsylvania bondholders are minimal despite a two-month state budget stalemate, said Moody's Investors Service.
Pennsylvania's constitution authorizes it to pay its general obligation debt regardless of a budget.
The commonwealth, which Moody's rates Aa3 with a stable outlook, paid its appropriation debt to the Pennsylvania Economic Development Financing Authority's Series 2012 Forum Place lease revenue bonds and the Philadelphia Regional Port Authority's Series 2008 lease revenue bonds.
"Some of its various other types of appropriation, lease and moral obligation bonds generally require budgetary appropriations to be paid, but we expect the commonwealth to make such appropriations or take other steps in time to pay bondholders on time and in full," Moody's said in a statement on Friday.
Fitch Ratings and Standard & Poor's rate Pennsylvania GOs AA-minus. All three major rating agencies downgraded the commonwealth last year, citing budget imbalance and the state's estimated $53 billion unfunded pension liability.
Gov. Tom Wolf vetoed the $30 billion budget for fiscal 2016 and the legislature's override attempt failed. Wolf, a Democrat, and the Republican-controlled legislature have remained at odds over taxes and spending related to funding for basic education and an overhaul of the pension system for state employees.
The Senate and House are scheduled to reconvene Sept. 14 and 21, respectively.
"Pennsylvania's chronically late budgets reflect poorly on governance and are reflected in its below-average rating compared to other states," Moody's said. "Because Pennsylvania is no stranger to late budgets, it has well-developed procedures to meet its obligations and keep government functioning."
On Sept. 1, state Auditor General Eugene DePasquale said his auditors would determine the possible financial impact of the budget stalemate on schools. Some school districts have had to borrow money to continue operating. Teachers and support staff at the distressed Chester Upland School District outside Philadelphia have been working without pay to start the academic year.
Some lawmakers have said they would work without pay until the state passes a budget.
The next debt obstacles for Pennsylvania, should the stalemate continue, are three certificates of participation payments totaling $97 million under a program involving energy infrastructure firm Noresco LLC.
Other debt this year subject to state appropriation are $291 million Sports & Exhibition Authority of Pittsburgh and Allegheny County, due Nov. 1, and $1.6 billion Commonwealth Financing Authority bonds, due Dec. 1.