The state of South Carolina is keeping its highest-available AAA credit rating, which makes it cheaper for the state to borrow – but a credit-rating agency is indicating that rating could be cut in the future.
Moody’s Investors Service reaffirmed the state’s AAA rating but with a “negative outlook,” setting the stage for a potential downgrade.
Moody’s had said it would downgrade the state’s credit rating if it downgraded the federal government’s credit. The two are linked because South Carolina is so dependent on federal government spending for military bases, Social Security, Medicare and Medicaid.
After Congress hammered out a deal to increase the federal government’s debt ceiling, the credit agency reaffirmed the federal government’s AAA rating but also added a “negative outlook.”
The state’s AAA credit rating makes it cost less for the state to borrow money for schools, roads and bridges.