 
The Commonwealth’s long-term general obligation debt is currently rated "AAA" by each of the three major rating agencies. The Commonwealth is one of only eight states to have such a distinction. Virginia also carries the highest short-term rating from all three agencies, making it the only state with the highest short- and long-term credit ratings from all three rating agencies: Moody’s Investor Services, Standard and Poor’s, and Fitch Investor’s Services, L.P. Maintaining the "triple AAA" ratings ensures that the Commonwealth issues debt at the lowest possible cost of borrowing. During the last four years, the authorizations of new tax-supported debt has declined from the total levels recorded in the late 1980s and early 1990s. This reversal of the Commonwealth’s escalating debt trend will have a positive impact on the Commonwealth’s current and future debt capacity. A number of new programs and enhancements to existing programs have been implemented in recent years to reduce the Commonwealth’s cost of borrowing, ease administrative burdens and time-consuming practices, expand the array of bond financing vehicles, and eliminate unfunded mandates on local governments in refinancing their public debt. Conservative debt management practices and strong, consistent financial management have resulted in the Commonwealth being recognized as a national leader in public financial management. Through the joint efforts of the Allen Administration and the General Assembly, the Commonwealth has continued to meet its priorities within the financing parameters recommended by the Debt Capacity Advisory Committee (DCAC). As a result of the 1997 moratorium on new tax-supported debt authorizations, increased general fund revenue, and lower than anticipated interest rates, it is expected that the next report of the DCAC will confirm a substantial increase in the Commonwealth’s debt capacity. The current state of the Commonwealth’s debt is best described by the following quote on a recent bond issue: "The Commonwealth’s superior credit standing results from conservative debt management, cautious and prudent budgeting, strong financial management practices, and a broad and resilient economic base." - Moody’s Investor Services, 1997 |
