The upgrade from Moody’s is the second credit rating upgrade in two years — after Fitch Ratings upgraded the Commonwealth’s credit rating last November — giving the Commonwealth its highest credit rating in more than a decade.
Ratings upgrade raises the possibility of additional taxpayer savings after last year’s upgrade resulted in a successful bond sale that yielded millions in savings.
Harrisburg, PA – Today, Governor Josh Shapiro announced that Moody’s Ratings has upgraded Pennsylvania’s credit rating to Aa2 from Aa3, citing the Commonwealth’s “sound fiscal management,” balanced budgets, and «steady” economic growth. This follows a similar upgrade from Fitch Ratings last year which raised Pennsylvania’s credit rating to ‘AA’ from ‘AA-,’ and a rating outlook upgrade from S&P Global Ratings, which improved Commonwealth’s outlook to ‘positive’ from ‘stable’ while affirming its A+ long-term rating.
This rating upgrade is in anticipation of the Commonwealth’s plans to sell $1.4 billion issuance of new money, and $238 million refunding, planned for mid-October. Pennsylvania is now at its highest rating since 2013.
This fiscal progress reflects Governor Shapiro’s commitment to responsible financial stewardship, supported by a growing economy and the bipartisan 2024-25 budget. As a result of those upgrades last year, the Commonwealth conducted a successful bond sale in December which saved Commonwealth taxpayers millions of dollars – including $99.7 million in gross debt service savings and $80.7 million of net present value debt service savings.
«Under my Administration, Pennsylvania has received two ratings upgrades in our first two years – a testament to our responsible fiscal stewardship that sets the Commonwealth up for success in the future while making critical investments in our economy and our workforce today,” said Governor Shapiro. «Pennsylvania has the only divided legislature in the country, but we’ve shown two years in a row that we can come together to pass balanced budgets that invest in Pennsylvanians, grow our economy, and create real opportunity for people all across the Commonwealth.»
«Pennsylvania is clearly on a strong path toward continued economic and financial success,” said Secretary of the Budget Uri Monson. «Our responsible investments and sound management are keeping the Commonwealth on solid fiscal footing while providing critical support to Pennsylvanians.»
Financial Overview and Ratings Rationale
Moody’s upgrade acknowledges Pennsylvania’s large, diverse economy and strong fiscal management as key strengths for the state’s creditworthiness. The Commonwealth’s expanded economic base and job creation efforts have made its financial outlook more stable, despite increasing spending pressures.
Additionally, Moody’s upgraded approximately $10.8 billion in outstanding general obligation bonds to Aa2 and raised ratings for several state-backed financial obligations, including:
- Appropriation-backed debt upgraded to Aa3 and A1
- Pennsylvania School District Intercept Program rating upgraded to Aa3
- Pennsylvania General Municipal Pension System State Aid Program rating upgraded to A1
- Pennsylvania Turnpike Commission’s (PTC) $983 million Motor License Fund-enhanced bonds upgraded to Aa3
This latest announcement reinforces that Pennsylvania’s economy is strong under Governor Shapiro’s leadership and that his Administration’s sound fiscal management is positioning the Commonwealth for long-term success.
The press release issued by Moody’s Investors Services can be found here and a chart of Pennsylvania’s ratings’ history can be found here.
