Moody’s Investors Service on Thursday downgraded Illinois’ general obligation credit rating by one notch — to the lowest rating in the state’s history — following a move earlier this week by Fitch Ratings.
Moody’s downgraded Illinois’ $27 billion of general obligation debt to A3 from A2, with a negative outlook after state lawmakers last week failed to pass a plan to deal with a $100 billion unfunded public pension liability.
Even prior to the downgrade, Illinois had the lowest rating of any U.S. state.
The downgrade followed action on Monday by Fitch Ratings, which cut Illinois a notch to A-minus with a negative outlook. Standard & Poor’s Ratings Services had downgraded the state to A-minus with a negative outlook in January. Any further downgrades by the three major rating agencies would put Illinois into the triple-B category, which is still considered investment grade.
Standard & Poors on Thursday said it was keeping Illinois’ A- rating, but said the state was on a “credit precipice” due to lake of pension reform.
Gov. Pat Quinn announced Thursday that he will be calling lawmakers back to Springfield June 19, so they can deal with the state’s pension crisis, among other things.