Moody's Investors Service reaffirmed its A3 bond rating for New Jersey and raised its outlook to stable from negative.
"New Jersey's A3 general obligation rating reflects the state's large, diverse and wealthy economy offset by large, growing long-term liabilities and the burden of significantly increased pension contributions, which are the result of substantial historic pension underfunding," the ratings firm wrote in an April 9 report.
New Jersey's financial picture appears improved compared to when the coronavirus first struck, Moody's said.
"The revision to the stable outlook reflects better-than-expected revenue performance in fiscal 2021, and the expectation that large resulting fund balances will support budget flexibility through the coronavirus recovery," the report said.
"The stable outlook further reflects our view that the current A3 rating is well positioned for the next 12-18 months, as the state continues to manage historic budget challenges," Moody's said, "including large structural budget gaps and growing pension contributions."