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- “Mississippi is in the best fiscal and financial shape in our state’s history – this is further proof of that,” said Governor Tate Reeves.
Governor Tate Reeves (R) and State Treasurer David McRae (R) jointly announced Tuesday that Fitch Ratings had upgraded Mississippi’s Gaming Revenue Tax Bonds Series 2015E and 2019A to AA-, with a Stable Outlook.
The governor’s office said the upgrade reflects increased confidence in the financial strength and stability of the revenue stream supporting the bonds.
“Mississippi is in the best fiscal and financial shape in our state’s history – this is further proof of that,” said Governor Reeves, who is a former State Treasurer. “I’m incredibly proud of what we’ve accomplished on behalf of Mississippians. We’re attracting billions in new capital investment, creating thousands of high-paying jobs, and doing the hard work that’s needed to position Mississippi for continued long-term economic growth. The upgrade is another big win for our state.”
Fitch Ratings said that the rating has been removed from Under Criteria Observation.
“The rating incorporates very strong coverage of maximum annual debt service (MADS) by discretionary and extremely sensitive revenues with declining growth prospects and is capped at Mississippi’s ‘AA’ Issuer Default Rating (IDR) risk level,” Fitch explained.
The rating agency added that the bonds are limited obligations of the state, payable from dedicated gaming tax revenue, which is an allocation of gross gaming tax revenue less a portion allocated to local government. Debt service is not subject to legislative appropriation.
“This upgrade is another vote of confidence in Mississippi’s financial future,” said Treasurer McRae. “Mississippi’s leadership team, led by Governor Tate Reeves, has worked hard to bring a business-minded approach to managing Mississippi’s finances, and it’s paying off. We’re protecting your money, strengthening our financial standing, and making sure Mississippi is positioned for long-term success.”
Fitch Ratings did note, however, that while Mississippi’s economy continues to diversify beyond its historical concentration in manufacturing, growth in service sector employment remains relatively weak.
“The state’s socioeconomic profile, while solid overall, exhibits wealth and educational attainment indicators that significantly lag national levels,” Fitch added.
Sustained revenue growth at or above the rate of inflation with reduced revenue volatility through an additional economic cycle was listed as the primary factor which could lead to another positive rating upgrade in the future.
