Analysis ranks Iowa 18th highest among states for its municipal bond credit outlook

Iowa came in 18th highest in a new ranking of states’ credit outlooks by municipal bond manager Conning Investment Products Inc., which downgraded its overall assessment from stable to negative.

Iowa received a “raw score” of 22.16 in the Conning study, which has lowered its assessment of the states’ credit quality due to the impact of the coronavirus pandemic. The state was ranked 42nd for its tax climate and third for economic debt and personal income.

Slumping oil prices and a decline in equity markets have also led to concerns in many states about reductions in tax collections, the analysis states. Ramped-up expenditures to fight COVID-19 have also added to states’ financial stress, according to the study.

Conning expects states’ municipal bond outlooks over the next year will worsen, even with the federal government’s efforts to provide coronavirus relief funding. But states’ credit performances will vary since many states are in better economic shape than others, according to the analysis.

The company, which manages more than $9 billion in municipal bonds for its clients, regularly ranks the states’ credit quality based on numerous economic metrics, including pension funding concerns.

Ranking of States’ Municipal Bond Markets

StateRaw ScoreOverall RankTax Climate RankEconomic Debt / Personal Income RankUtah12.6198Colorado14.1221717Washington15.3231929Idaho15.44216South Carolina17.5253020Wyoming17.56619Arizona17.6872011Texas18.281335Tennessee18.89185Florida18.9810412Oregon19.9211828North Dakota20.0812167Nevada20.2813713Nebraska20.414281North Carolina20.76151510Virginia21.32162518New Hampshire2217627Iowa22.1618423Minnesota23.08194516California23.12204839Delaware23.24211146Massachusetts23.52223644Montana23.8823526Oklahoma24.1224272Georgia24.16253214New Mexico24.4262231Alabama24.8274030Wisconsin25.52282615Indiana26.24291023Missouri26.4301421Maine26.52313334South Dakota29.963224Maryland28.2334341Rhode Island28.2343940Vermont29.44354443Pennsylvania29.64362933Kansas30.24373422New Jersey30.4385050Ohio30.56393819Connecticut30.92404747New York30.92414936Hawaii31423749Michigan31.2431225Alaska33.0844342Arkansas34.72454624Illinois38.2463548West Virginia38.52472338Mississippi39.88483132Louisiana39.88494137Kentucky40.64502445

Source: Conning Investment Products Inc.

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