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Ratings Agencies Express Concern Over Maryland Pension Debt, But Uphold Rating

The major ratings agencies all upheld Maryland’s AAA bond rating this week. But all three agencies expressed concern over the state’s pension debt. S&P in particular warned that pension liabilities, if not addressed, could lead to a rating downgrade in the future. From the Maryland Reporter: Fitch Ratings and Moody’s Investor Services call ...
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How Credit Rating Agencies Reacted to Illinois Pension Ruling

None of the three major rating agencies changed their outlook on Illinois’ credit in the wake of a lower court ruling that deemed the state’s pension reform law unconstitutional. But rating agencies are certainly keeping a close watch on the state as the reform law moves up to the Supreme Court. And all three agencies had something to say after ...

Fitch Downgrades Pennsylvania; “Weakened” Pension System Drives Demotion

Credit rating agency Fitch has downgraded Pennsylvania’s general obligation bonds one notch, from AA to AA-. What’s more, Fitch changed the state’s outlook from “stable” to “negative” – meaning another downgrade could be coming if Pennsylvania doesn’t address the structural problems that led to this recent demotion. The structural ...
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Fitch Weighs In On New CalPERS Compensation Rules

This week, CalPERS approved 99 types of additional income that workers can include in their pension calculations. The change will increase the pensions of many workers in the CalPERS system, and the fund has already drawn flak from California Governor Jerry Brown. Now, the credit rating agency Fitch is in on the game, too. Fitch says the changes will ...
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Puerto Rico’s Pension Obligations May Lead to US-Style Bankruptcy

Puerto Rico may not have statehood status, but it’s picking up some of the United States’ habits. Lately, that means weighing bankruptcy. And, like the United States, ballooning pension obligations are a major reason Puerto Rico is wearing the proverbial fiscal handcuffs. From Reuters: Momentum is building toward a deal that would make painful ...
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Is S&P Downplaying the Instability of Local Governments Saddled With Pension Obligation?

Local governments around the country are increasingly saddled with mounting debts due to outstanding pension obligations. So why are many of them seeing boosts in their credit ratings? At least one credit analyst is wondering aloud whether rating agencies –specifically, S&P– are purposely downplaying the risk of investing with local ...
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