Strong economy leads to upgrade in Arizona’s credit rating

A solid and increasingly diversified economy, along with prudent budget policies, have led to an upgrade in Arizona’s credit rating.

Rating agency Moody’s Investors Service said it expects Arizona’s economy “will continue to perform positively and that the state will maintain ample reserves” in boosting Arizona’s rating to the second highest notch.

Moody’s rates states on a 21-grade scale, from C at the low end to Aaa at the top. Arizona now has the second highest rating, at Aa1, up from Aa2 previously. The increase means the state could benefit from slightly lower interest rates when selling bonds or issuing other debt. Arizona has about $1.5 billion in state-issued bonds and similar instruments that have been evaluated by Moody’s.