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Fitch affirms West Virginia bond rating

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Thanks to strong financial management, elimination of the OPEB liability and strong performance through the Great Recession, Fitch Ratings has affirmed the state's bond rating of AA+ for general obligation debt, Gov. Earl Ray Tomblin announced June 19.

According to Fitch, the state received the rating because of the "state's focused and disciplined efforts to address its accumulated financial challenges, proactive approach to addressing long-term liabilities and maintenance of sizable reserve balances."

The West Virginia Economic Development Authority and School Building Authority both earned a AA rating, with stable rating outlooks.

"This is a direct result of the hard work the state has put forth to keep our financial house in order," Tomblin said. "West Virginia's solid commitment to addressing its financial obligations, such as our retirement systems and other post-employment benefits, shows rating agencies that we pay our bills and honor our debts."

The rating allows West Virginia to borrow money at lower interest rates to finance projects for infrastructure, waste and water projects, as well as economic development projects.\

"A stable bond rating is great news for all West Virginians," said Jason Pizatella, acting secretary of the Department of Revenue. "With this rating outlook, we will continue to confront the financial and economic challenges ahead while our state government keeps its promise to be good stewards of taxpayer dollars."

The state's bond rating for general obligation debt did not increase over 2011's rating. However, the state did increase its ratings three times in three consecutive years.

Key aspects that determine Fitch's ratings include:

 

  • The state's strong financial management and sound reserve position;
  • Efforts to fund the actuarially calculated annually required contribute, ARC, and the addition of assets in excess of the ARC to pension systems;
  • Additional action taken by the Legislature to eliminate the remaining other-post employment benefits liability;
  • Performance through the recessionary years was notably stronger than that of the nation.