South Dakota Maintains Highest Credit Rating

“AAA is the highest possible rating assigned by credit rating agencies,” said Gov. Noem. “Sound fiscal management is a priority for my administration. As a result of our fiscal discipline, maintaining reserve funds at 10 percent, and a structurally balanced budget, South Dakota continues to benefit from the highest rating possible. The financial impact of the AAA credit rating will continue to position the next generation for success.”

Both S&P and Moody’s note the strong financial condition of South Dakota, strong level of reserve funds, well-funded pension system, and a focus on a structurally balanced budget as key reasons for reaffirming the state’s AAA rating.

“We consider the state’s management practices strong under S&P Global Ratings’ financial management assessment (FMA), indicating that, in our view, practices are strong, well embedded, and likely sustainable,” said S&P.

Moody’s Investors Service stated, “The stable outlook reflects the expectation that low leverage and fixed costs combined with a very healthy financial position will support South Dakota’s strong credit quality going forward.”

Credit ratings give potential bond purchasers a measurement of state performance and credit worthiness. High credit ratings allow issued bonds to carry a lower interest rate, providing interest savings to issuers as well as the taxpayers in the State of South Dakota.