Tennessee Comptroller Justin Wilson Tuesday sent a letter to top lawmakers about recent upgrades of the state’s bond rating due to recalibrations by Fitch Ratings and Moody’s Investors Service.
Moody’s last week upgraded Tennessee’s general obligation rating to Aaa from Aa1, while Fitch on April 5 upgraded its rating to AAA from AA-plus. Standard & Poor’s rating is AA-plus.
“The changes made by Moody’s and Fitch do not represent ratings upgrades for Tennessee, relative to its peers in state government,” Wilson wrote. “Because other states are also having their ratings adjusted upward, the practical effect is that Tennessee’s bond ratings remain at the same level within that group as they were before the changes were made.”
The state’s ratings now compare more favorably with non-governmental debt issues such as private businesses, he said.
“Please note that with the adjustments, Tennessee now has the highest ratings available from Moody’s and Fitch,” Wilson said. “As you know, high bond ratings translate into lower interest rates on money the state borrows, which can result in substantial savings for taxpayers.”