Moody’s Investors Service upgraded New Jersey’s issuer rating and general obligation bonds to A1 from A2 Thursday.
The upgrade “incorporates a solid economic recovery, with job gains leading the region and driving employment above the state’s pre-pandemic peak,” Moody’s said.
The rating agency said the upgrade is supported by the state’s commitment to full, actuarial pension contributions through fiscal 2024 and its additional allocations of funds to a program to defease debt and cash-fund capital projects.
“These factors underscore continuing improvement in New Jersey’s governance characteristics,” Moody’s said.
The rating outlook, previously positive, is now stable at the new, higher rating.
In connection with the GO upgrade, Moody’s upgraded Garden State Preservation Trust bonds to A1 from A2, upgraded the state’s subject-to-appropriation bonds to A2 from A3 for more essential projects and to A3 from Baa1 for bonds that financed less essential projects and bonds supported by the state’s moral obligation pledge.
Moody’s also assigned the A2 rating to a forthcoming sale of $804 million School Facilities Construction Refunding Bonds Series RRR and forward delivery $255 million School Facilities Construction Refunding Bonds, 2024 Series SSS.
Program pledge specific ratings for the state’s aid intercept enhancement systems — the New Jersey Qualified School Bond Program and the New Jersey Municipal Qualified Bond Program — were also upgraded to A2 from A3.
After a series of downgrades under former Gov. Chris Christie, rating agencies have changed direction with upgrades starting in 2022 as Murphy’s administrations paid down debt and increased pension funding.
Fitch Ratings rates New Jersey A with a positive outlook. S&P Global Ratings assigns its A-minus rating, and assigns a positive outlook. Kroll Bond Rating Agency assigns its A rating and positive outlook.