September 18, 2012 / 2:20 PM / 7 years ago

S&P puts negative outlook on New Jersey bonds

Sept 18 (Reuters) - Standard and Poor’s Ratings Services revised the rating outlook to negative from stable on New Jersey’s general obligation, appropriation and moral obligation debt outstanding, citing structual imbalance and optimistic revenue assumptions.

S&P affirmed its ‘AA-‘ rating on the state’s GO debt, ‘A+’ rating on the state’s appropriation debt and ‘A-‘ rating on the state’s moral obligation debt.

“We revised the outlook to reflect our view of the risk of revenue assumptions we view as optimistic, continued reliance on one-time measures to offset revenue shortfalls, and longer-term growing expenditure pressures,” said Standard & Poor’s credit analyst John Sugden.

The rating agency said that these pressures include pension funding increases, Medicaid funding, and debt service.

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