SAN FRANCISCO — Nevada’s woeful economy led Standard & Poor’s to downgrade the state’s general obligation bonds to AA from AA-plus Thursday afternoon.
The downgrade reflects the agency’s analysis of Nevada’s “severe economic cyclicality,” which has seen the state on the low end of the cycle for several years, as reflected in worst-in-the-nation foreclosure and unemployment rates, home-price value declines, and personal income growth rates.
“Although the state’s credit remains strong in our view due to well-managed finances and good liquidity, we believe its economic performance since late 2007 suggests a lack of depth and susceptibility to weakened consumer confidence,” Standard & Poor’s said in its news release announcing the downgrade.
In connection with the GO downgrade, the agency also downgraded the long-term underlying ratings of Nevada’s appropriation-backed certificates of participation to AA-minus from AA.
