Despite the cooling of its real estate market, Nevada’s tourism- and gambling-based economy has maintained its momentum, according to a report released Wednesday by Standard & Poor’s.
The report says the state’s AA-plus general obligation bond rating reflects strong financial management committed to maintaining and replenishing reserves, moderate but growing debt, and a strong track record of pay-as-you-go financing for capital projects.
Thanks to economic growth in recent years, the state’s reserves are fully replenished to early 2000’s levels, the report said. Even as 2008 revenues come in below expectations, there is no plan to tap reserves, and there appears to be the political willingness to cut spending, an important credit consideration.
“The state’s debt rating stability is dependent on the economy not worsening, and maintenance of reserve levels,” credit analyst Ian Carroll said in a statement. “If, however, the housing market’s ills spread into other sectors of the Nevada economy, such as commercial construction and tourism, credit quality could suffer.”
Fitch Ratings assigns Nevada GOs its AA-plus rating, and Moody’s Investors Service give the credit an equivalent Aa1.
