Gov. Gregoire announces state�s strong bond ratings

For Immediate Release: July 2, 2008

Two international bond rating firms recognize Washington�s economic performance

OLYMPIA � Gov. Chris Gregoire today announced that Washington state earned a �AA� rating from Fitch Ratings and an �AA+� rating from Standard & Poors, two international bond rating firms. The rankings are amongst the highest that the two firms give for bonds.

�Building a solid economic base for the state is paying off,� Gregoire said. �It�s our job to invest taxpayer money wisely, hold state agencies accountable for results and keep a healthy reserve. This pays off as we enter the marketplace to sell bonds for construction and other capital projects. We earn a good value for the state when our high ratings help us get low interest rates.�

According to a statement released by Fitch, Washington�s �AA� bond rating �is based on the state�s sound financial and debt policies and economic and financial strength.�
The company outlined a number of positive indicators that drove the decision to assign the �AA� rating, including:

• Nonfarm employment, which rose 3 percent in 2006, compared to the nation�s growth of 1.8 percent;


• State employment, which rose 2.5 percent, compared to 1.1 percent for the nation;


• Personal income growth, which has considerably exceeded national levels in 2006 and 2007, and remains ahead of both regional and national trends through the first quarter of 2008; and


• State unemployment, which continues to trend below the national average.



In addition, Fitch points out that the 2005�07 biennium was the strongest for Washington since the 1989�1991 biennium, with revenue growth of 10.5 percent in fiscal 2006 and 8.4 percent in fiscal 2007.


It�s notable that Fitch commented on our economy outperforming that of states across the country,� said Victor Moore, Office of Financial Management director. �We have made decisions to invest in programs that strengthen Washington�s economy so that our citizens and businesses can flourish.�

Standard & Poor�s rating reflects �the state�s very strong credit factors across a variety of fundamental economic and financial measures,� according to a statement released by the company. �Although signs of slowing economic growth are becoming evident in Washington state�s revenue forecasts, the state�s economy continues to outperform, or at least lag, the slowdown seen at the national level.�

Standard & Poor�s also notes that if Washington is entering an economic slowdown, �downside risks to its credit are at least partially mitigated by the fact that it does so from a position of relative financial strength� with its rainy day account.

The rainy day fund was promoted by Gregoire as a means to provide a layer of financial protection for the state as a hedge against a souring economy or financial emergency, such as that posed by 9/11.

�While 29 states are now confronting budget deficits, we in Washington are in a better position to ride out this economic storm,� Gregoire said. �It�s not just me pointing this out. The financial community agrees.�

The ratings were issued in advance of a sale of general obligation bonds scheduled July 9.

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