How Sub-nationals Can Improve Their Credit Rating (Part 2 of 4)

How Sub-nationals can Improve Credit Rating (Part 2 of 4)

This is the second part of our series, where we explore how sub-national entities such as states can boost their credit ratings and drive economic growth.

Kentucky State in the US has undergone a remarkable credit rating upgrade, grabbing headlines and showcasing the power of strategic legislative efforts. By focusing on governance practices and enacting pension reforms, the state demonstrated its commitment to fiscal responsibility. Credit Rating Agencies took notice, recognising the state’s dedication to financial stability and upgraded its creditworthiness.

Illinois State, also in the US, is another compelling example of how sub-nationals can enhance their credit profiles. After two decades without a credit rating upgrade, Illinois received nine upgrades in just two years. The state’s proactive measures, such as paying off past-due bills and bolstering its rainy day fund, earned accolades from rating agencies.

In late 2023, Illinois saw its Issuer Default Rating and General Obligation Bonds upgraded to A-, with a Stable Outlook. This upgrade reflects the state’s improved fiscal management and ability to maintain budget stability.

The rating upgrade also considered Illinois’ robust economic foundation, particularly its GDP, which ranks fifth largest among U.S. states. With Chicago as a key economic hub, Illinois boasts a diverse revenue base, including income and sales taxes, ensuring long-term financial resilience.

Through disciplined fiscal leadership, Illinois has effectively managed its long-term liabilities and reduced budgetary strains. The state’s commitment to financial prudence has positioned it for sustainable growth and enhanced creditworthiness.


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