South Dakota’s Triple-A Credit Rating

The State of South Dakota officials proudly released the newest report on the State’s Credit Rating.

South Dakota Maintains a High Credit Rating

From not even being rated until 2006, in the last decade and a half, the State moved to the AA status, through AA+ (2011) to the much-desired “triple-A” in 2015 and managed to maintain the status ever since. The steady progression is a success by itself, avoiding fluctuations to which several other states have unfortunately succumbed and with which they are still struggling.

According to the new State’s Governor, Kristi Noem, her priorities are fiscal discipline, keeping reserve funds at 10%, and a well-structured budget, joined in securing a sound financial basis for the generations to come.

The critical factors pronounced by both warranted rating agencies, Standard & Poor’s Global (S&P) and Moody’s Investors Service, are the following:

  • solid financial condition of South Dakota,
  • substantial reserve funds,
  • well-funded superannuation plan,
  • and a focus on a structurally balanced budget.

Credit ratings are reliable indicators of state performance measurement and creditworthiness for potential bond purchasers.

Both assessment agencies predict positive trends for the credit rating of the State of South Dakota if the practices remain closely guarded by the already set standards.

The higher the credit ratings, the lower the interest rate of issued bonds, resulting in favorable interest savings to issuers and subsequently to the taxpayers in the State of South Dakota.

Leave a Reply

Your email address will not be published. Required fields are marked *