The State of South Dakota has once again achieved a AAA Issuer Default Rating.
Gov. Dennis Daugaard says by sticking to conservative budget practices and keeping our reserves at 10 percent of our annual budget, South Dakota continues to benefit from the highest rating possible from Fitch.
In the report Fitch lists the state’s balanced budget requirement, broad sales tax, ability to reduce spending, lack of long-term liabilities and anticipated revenue growth as key reasons for reaffirming the state’s AAA status. The rating affects $122 million of bonds issued through the Vocational Education program within the South Dakota Health and Educational Facilities Authority as well as future bond issues made through the authority.
Fitch awarded the state a AAA rating in 2016. The state is also rated AAA by S&P and Moody’s, which are expected to renew the state’s ratings next month.
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 as well as recipients.
