Maryland’s credit rating was downgraded for the first time in decades, confirming signs that the state’s economy is flailing. Moody’s, one of the top-three credit rating agencies, issued Maryland’s Aa1 rating with a “stable” outlook, which means higher borrowing costs and a hit to the state’s creditworthiness. A Moody’s downgrade is typically viewed as a red flag by investors and lenders. It could yield higher borrowing costs and more expensive loans, along with a loss of confidence among residents as it sends a clear signal about the state’s underlying financial problems. It can also have a ripple effect on cities, counties, school districts and other entities that could see higher borrowing costs even if their finances are stable.
Quoted: “The downgrade was driven by economic and financial underperformance compared to Aaa-rated states, which is expected to continue given the state’s heightened vulnerability to shifting federal policies and employment, and its elevated fixed costs,” Moody’s said in its report.
