Some good news on the Wall Street front for the credit ratings of the state and the city of Providence.
Standard & Poor’s rating agency has affirmed the state’s credit rating and removed Rhode Island government from its CreditWatch list after the General Assembly voted to pay the $12 million installment on the state-backed bonds that financed the ill-fated 38 Studios video game fiasco.
House Speaker Nick Mattiello, D-Cranston, said the 38 Studios decision led to the credit rating improvement. ``The affirmation from S&P shows that our decision was sound and will ensure protection of the state’s investments and reputation,’’ said Mattiello in a statement.
``At a cursory glance, a bond rating may not seem all that important,’’ said Mattiello. ``But it is crucial as we look to improve our financial outlook. We can’t reverse our course and renege on an obligation that could jeopardize economic growth for decades to come. This message from S&P is good news for us.’’
Gov. Lincoln Chafee also advocated paying the $12 installment.
Standard & Poor’s has also improved Providence city government’s credit outlook from stable to positive, citing ``strong budgetary performance and improving general fund balance.’’
``S&P’s positive outlook on our city’s general obligation debt is evidence that we have made significant progress in our efforts to restore long-term fiscal stability. We have taken control of Providence’s finances. The next administration must continue the fiscal discipline and responsibility my administration has brought to city hall,’’ said Taveras, who is a Democratic candidate for governor.
The credit ratings are important because a drop in the rating increases the cost of long and short-term borrowing for the state and the capital city.