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SUNDAY, AUGUST 28, 2005
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Moody’s upgrades state’s bond rating

MONTGOMERY (AP) — Moody’s Investors Service, a major credit rating company, has upgraded Alabama’s bond rating, which could lower the state’s interest rate on future bond issues.

Moody’s said Friday it had raised Alabama’s rating on most of the state’s bond debt from Aa3 to Aa2, its third highest rating for states. Moody’s cited several reasons, including state government’s “strong financial management practices,” state tax collections exceeding forecasts in an improving economy, and the growth in jobs since 2004.

Gov. Bob Riley said the upgrade “is another positive sign that Alabama is now on the right track.”

Alabama’s higher quality rating likely will lower the interest rate it will have to offer investors the next time it sells bonds, state Finance Director Jim Main said.

Seven states have the top Moody’s debt rating of Aaa for general-obligation bonds, which pledge all of a state’s tax revenues toward repaying the debt.

Twelve states have the second-highest rating of Aa1. Twelve, now including Alabama, are rated Aa2, and 12 are rated Aa3.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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