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Fitch Upgrades South Dakota to AAA





            Office of Gov. Dennis Daugaard

500 E. Capitol Ave.

Pierre,S.D.57501

(605) 773-3212

www.sd.gov

 

 

 

 

FOR IMMEDIATE RELEASE:  Wednesday, June 15, 2016

CONTACT:  Tony Venhuizen or Kelsey Pritchard at 605-773-3212

 

EDITORS/NEWS DIRECTORS:  For audio from the Governor on the Fitch upgrade, visit news.sd.gov/media.aspx and click on “Audio” under “Governor Dennis Daugaard.”

 

 

Fitch Upgrades South Dakota to AAA

 

PIERRE, S.D. – Gov. Dennis Daugaard announced today that Fitch has upgraded South Dakota’s Issuer Default Rating to AAA and has upgraded state-linked debt to AA+. The upgrade affects $134 million of bonds issued through the Vocational Education program within the South Dakota Health and Educational Facilities Authority as well as $4.5 million of South Dakota Building Authority currently rated by Fitch. The upgrade will also affect future bond issues made through these authorities.

 

“Five years ago we set a goal to be recognized as AAA with all the bond rating agencies. With this latest upgrade, we have achieved that goal.  We now hold the best ratings possible,” Gov. Daugaard said. (Governor Audio Clip 1)

 

This upgrade is the highest rating South Dakota can receive from Fitch. It marks the third upgrade that South Dakota has received from the three main rating agencies over the past year. South Dakota now holds the highest rating that can be awarded by S&P, Moody’s and Fitch. 

 

In their release of the rating, Fitch attributed the upgrade to South Dakota’s “consistently conservative fiscal operations, including ample reserve balances and a history of maintaining budgetary balance.” Fitch also noted South Dakota’s tax structure, saying “revenues in South Dakota have generally exhibited less sensitivity to broader national economic cycles than those of other U.S. states.”

 

The ratings agency highlighted the state’s recent record of low debt and healthy pension system. Fitch says South Dakota’s willingness to make cuts to spending in order to maintain structural balance and recent financial practice improvements added to the state’s strengths. (Governor Audio Clip 2)

 

Credit ratings give potential bond purchasers a measurement of state performance and credit worthiness. Upgrades typically allow issued bonds to carry a lower interest rate, providing interest savings to issuers that translate through to the state of South Dakota.

 

“These types of upgrades demonstrate our state’s exceptional credit worthiness to financial markets. This leads to substantial savings in future interest payments,” Gov. Daugaard said. “We’ve worked hard to place our state on a firm financial footing, and that stewardship is paying dividends.”

 

Read more about South Dakota’s upgrade from Fitch here.

                                                               

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