S&P Global Ratings said it has revised its outlook on the state of New Jersey to stable from negative, and affirmed its A-minus rating on the state's general obligation bonds, its BBB-minus rating on the state's appropriation-backed debt, its BBB rating on New Jersey government departmental appropriation-backed debt, and its BBB-minus rating on state moral obligation debt.

"The outlook revision reflects our belief that the state's combined pension-funded ratio, calculated on a Governmental Accounting Standards Board 67 basis, will stabilize or improve over our one-year outlook horizon, following a decline in the most recent July 1, 2016, actuarial valuation," said S&P credit analyst David Hitchcock.

New Jersey's high unfunded pension liabilities and underfunding of the state's annual actuarially determined contribution remain key credit considerations and a source of future budget pressure, S&P said.

New Jersey's pension system remains among the worst funded in the nation and, S&P said, a primary reason why its GO rating on New Jersey is second-lowest among the states.

S&P sees New Jersey's pension woes stabilizing.

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