Moody’s upgrades Oklahoma’s credit outlook to positive

State Treasurer Randy McDaniel announced this week that Moody’s Investors Service has upgraded the state’s credit outlook from stable to positive. The rating agency concurrently affirmed Oklahoma’s credit rating of Aa2.

Moody’s action follows a meeting last month with state leaders to provide rating analysts with an update on the economy, credit trends, and policy priorities.

“The state’s improved fiscal condition is being recognized nationally. Our efforts to increase reserves, eliminate structural deficits, improve pension finances, and diversify the state’s economy are working,” McDaniel said. “Our financial house is in order and we are poised to strengthen our position in the months and years ahead.”

Moody’s analysis acknowledges a number of positive trends for the state, including Governor Kevin Stitt’s commitment to sound financial practices and increasing rainy day savings, along with the Legislature’s ongoing efforts to responsibly manage the state budget.

“The positive outlook reflects our expectation that strong fiscal management and a commitment to increasing reserves will continue, in line with the state’s goal of strengthening its preparedness for the next cyclical economic downturn,” Moody’s said in a written statement. “We also expect the state’s debt and pension burden will continue to run well below the 50-state median.”

While the state’s bond rating – two notches below the best possible – was not changed, Moody’s listed factors that could lead to a rating upgrade including, increases in financial reserves, enhancement of the state’s fiscal flexibility, and further economic diversification.