OKLAHOMA CITY — Standard & Poor’s Global Ratings has issued a revised outlook for the State of Oklahoma, elevating its status from stable to positive, and affirmed the state’s ‘AA’ long-term issuer credit rating, State Treasurer Todd Russ announced.
The upgraded outlook from stable to positive applies to the appropriation-backed outstanding debt of the Oklahoma Development Finance Authority and the Oklahoma Capitol Improvement Authority, including ODFA’s $3.88 million master real property lease revenue bonds from series 2023A. These particular bonds are issued by the Legislature on behalf of the Oklahoma State System for Higher Education, with sale proceeds being used to finance capital enhancement and construction at state colleges and universities, Russ related.
According to S&P, “The outlook reflects our expectation that Oklahoma will continue its practice of tight expenditure management, and its accumulation of large reserve balances should provide the state with a substantial financial buffer to navigate potential near-term cyclical pressures.”
The treasurer welcomed the news as an endorsement of the state’s fiscally conservative practices.
“Recognition of Oklahoma’s improved financial condition is well-earned and can be attributed to state leaders’ commitment to keeping debt levels low, decreasing pension system liabilities, and providing reserves for the Rainy Day Fund,” Russ said. “A better credit status should translate into reduced costs for public infrastructure projects.”
The report from S&P comes on the heels of the credit rating agency’s invitation by Russ to visit Oklahoma in the spring, where the governor, state officials and business leaders showcased the state’s extensive presence in the aerospace and defense industries through tours at Will Rogers World Airport, Boeing, and Tinker Air Force Base.
In its justification for the state’s upgraded outlook, S&P pointed out that Oklahoma “has made significant efforts to diversify its economy, which, over the long-term, could bolster its employment and overall economic metrics during downturns.”
S&P hinted at a future raise in Oklahoma’s credit rating “should the state continue to attract development that grows its economy, while also demonstrating a firm commitment to structurally balanced financial performance and sustaining reserves and liquidity.”