Fitch

Stronger-than-expected economic numbers could boost bond issuance.

Labor costs that continue to squeeze operating margins remain the biggest obstacle for the nonprofit healthcare sector.

"The upgrade of Pennsylvania's IDR and related ratings reflects recent use of revenue surpluses to build its reserves to historical highs and Fitch's expectation that substantial reserves will be maintained in the near term," the rating agency said.

Fitch also affirmed the GOAA's AA-minus rating on $1.8 billion of outstanding senior lien airport facilities revenue bonds and A-plus on $867 million of subordinate lien airport facilities revenue bonds.

Year-to-date, MIA has seen passengers levels at 113% of pre-COVID 19 levels, boosted by domestic travel, according to a report from BofA Global Research.

The upgrade "reflects a material improvement in the MTA's fiscal outlook, which was largely driven by New York State increasing the maximum rate of the payroll mobility tax," Fitch said.

Ahead of issuance, the city's $40.2 million of general obligation bonds received top marks from Fitch and S&P.

Analysts discussed proposed changes to its metrics that will be finalized in January. An estimated 35% of ratings could experience upgrades or downgrades.

"I am excited to lead the team through what will be an exciting period of growth in public finance," Anjali Sharma said.

S&P said the outlook revision reflects "our view that Pennsylvania has continued to make progress toward structural budgetary balance." Earlier this month, Moody's revised its outlook on the state to positive.

State and local governments showing strength in a time of financial uncertainty

Moody's also affirmed the A3 rating on the MTA's $20.6 billion of transportation revenue bonds.

"Pennsylvania's positive outlook is based on the significant increase in budget reserves over the past three fiscal years to levels consistent with higher-rated peers," Moody's said.

"The improved rating outlooks are critical for the Power Authority to ensure that we can continue leveraging the capital markets," said NYPA President and CEO Justin E. Driscoll.

Florida led the nation in payroll growth in July, Wells Fargo said in a Friday report, which noted most of the upturn was in the healthcare and professional and the scientific and technical services sectors while leisure and hospitality shed jobs.

"The limited scope of muni debt affected suggests a marginal impact on the muni market, if any," BofA strategists said.

While it's still relatively early to tell how much — if at all — the muni market will be impacted, Kara South, portfolio manager at GW&K Investment Management, said downgrades of certain municipal bonds are likely to follow.

Most states continue to fare well, despite economic shocks and weakening revenue growth.

Fitch said its upgrade of Kentucky's IDR "reflects material improvements to Kentucky's fiscal reserves since 2020 as a result of improved budgetary discipline.

"When the rating agencies developed and rolled out their ESG scores, they said their ESG scores would not impact an issuer's credit rating. We are holding them to their word," said Ben Watkins, director of the state Division of Bond Finance.