Ohio keeps 2nd-highest credit rating from S&P

7/11/2003

COLUMBUS - Standard and Poor has joined Wall Street's two other major credit-rating agencies in keeping Ohio's rating at the second-highest level available for states.

S&P went one step beyond Moody's and Fitch, not only keeping the rate at AA+ but also removing Ohio from its negative outlook list.

“This is good news for the governor's Third Frontier bond issue on the ballot in November,” state Budget Director Tom Johnson said.

“We could have had higher interest rates.”

Moody's kept Ohio on its negative outlook list because of the state's weak economy and its low budgetary reserves. Fitch has no outlook list.

Voters will be asked to approve the borrowing of $500 million over 10 years as part of Gov. Bob Taft's Third Frontier initiative to help develop Ohio's high-tech and bio-technology industry.

The state is constitutionally bound not to allow its debt service to exceed 5 percent of its general budget.

The state is now at 4.3 percent and will close in on the cap with Third Frontier and other planned borrowing.