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Missouri’s Third AAA Rating Affirmed

By Sally Maison
Published: Saturday, September 26th, 2009

Missourians have one more good reason to celebrate despite this economic crunch: their state received its third AAA rating from Finch, Inc., making it one of only seven states in the United States to reach this status.

Missouri’s Third AAA Rating AffirmedThis week, the Fitch Group affirmed that Missouri is an AAA-rated state and has managed to keep this status even as the country goes deeper into recession. Fitch, which is based both in New York and London, is one of the three largest credit rating company, along with Moody’s and Standard and Poor’s. Finance analysts say that the third AAA for Missouri means millions of dollars of savings on city projects.

Investors and other lenders or companies will charge Missouri lower interest rates and bond costs because it has proven to be highly creditworthy. This is good news for ordinary Missourians as well since this means that there will be no tax raises in the near future.
This also means that Missourians will not feel the effects of recession as much as other states now do. This strong fiscal management of the Show-Me State is a huge factor in Fitch’s decision. The rating company says that Missouri is managing its funds well and has been prudent on loan applications.

The employment condition in the Midwest state is another factor in the approval by Fitch. Back in 2008, the employment rates in the whole United States dropped by 0.4 percent. Missourians only saw a 0.1 percent decline in that same year. It has again proven its employment stability this July with only 2.6 percent job loss as opposed to the country’s 4.2 percent.

The rating from Fitch does more for Missouri than making it look good on paper. It means that the Show-Me State’s millions of dollars’ addition to the fund reserves, which they can pull out in the future.

However, Governor Jay Nixon tells constituents to keep the Show-Me attitude of cautiousness. He says that the challenges in the economy are not yet over. 

Experts expect Missouri to cut on budget in order to keep the rating. Earlier this year, it has borrowed $300,000 from the reserve to cushion hits of the recession. Some analysts thought that it could cost the state its rating, but Fitch remained confident in Missouri’s broad economic base.

Governor Nixon says that they will tighten their belts more and will continue to focus on their priorities. Financial advisers add that they are looking two years forward so they can be well-prepared for whatever may possibly hurt their budget.

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