Moody’s Investgors Service plans to include unfunded pension liabilities into its credit rating for U.S. states’ debt, the New York Times reported, citing Robert Kurtter, managing director for public finance at Moody’s.
States haven’t included those liabilities until now, prompting growing unease among investors in municipal bonds, the newspaper said.
The new system will be comparable to the way Moody’s now rates corporate and sovereign debt, the newspaper said.
States with the highest total indebtedness include Connecticut, Hawaii, Illinois, Kentucky, Massachusetts, Mississippi, New Jersey and Rhode Island, as well as Puerto Rico, the Times reported.
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