Ryan Announces Fitch Upgrade Of State G.O. Bond Rating To AA+

SPRINGFIELD - Governor George H. Ryan today announced that Fitch IBCA has upgraded the state's general obligation bond rating from AA to AA+. A second rating agency, Standard and Poor's, has affirmed its AA rating of the state's G.O. bonds but revised upward its outlook on the state's credit from stable to positive.

"I'm pleased that both rating agencies have recognized the strength and diversity of the state's economy as well as our ongoing efforts to pass responsible budgets that continue to strengthen the state's financial condition," Ryan said.

"The upgrade from Fitch and a positive outlook from Standard and Poor's confirm that Illinois is moving in the right direction with the new rainy day fund and programs such as Illinois FIRST, which will bolster the state's infrastructure while maintaining moderate debt levels."

Fitch IBCA and Standard and Poor's issued ratings in conjunction with the scheduled sale on June 15, 2000, of $300 million in general obligation bonds.

"Illinois' credit strength has rested with the breadth, diversity and wealth of the economy and the very moderate burden of debt on resources," according to Fitch. "The rating upgrade reflects the return of fiscal stability, the larger balances carried by the state in recent years and the creation this legislative session of a reserve account."

"Financial operations have been successful in recent years, with good growth in revenues and controlled expenditures," Fitch said.

Citing "a deep and diversified economy, an improving financial condition, and moderate debt levels" as the basis for a positive outlook, Standard and Poor's noted that state economic growth may be slowing slightly.

"Despite the softening economic conditions, the state's recent history of conservative budget practices should continue to aid it in producing continued financial improvement," the rating firm said.

"Strong personal income tax receipt growth, coupled with decreases in subsidized care, social service caseloads, and overall spending restraint, have produced improved case balances that were $1.351 billion at fiscal year-end 1999, the highest in state history," Standard and Poor's said.

Regarding Governor Ryan's five-year, $12 billion Illinois FIRST initiative to build, repair and upgrade the state's infrastructure, Fitch noted, "The planned bonding is well within the state's capacity; if authorized but unissued bonds, including Build Illinois, are added to outstanding debt, the total would equal about 4.3 percent of personal income, a moderate level."

During fiscal year 2001, Illinois expects to sell $1.3 billion in general obligation bonds and $125 million in Build Illinois bonds.