GovGuam's bond rating improves

The Government of Guam's bond rating outlook has been changed to stable.

Moody's Investor Service announced the change over the weekend.

Last March,  Moody's changed the outlook on the GovGuam's Issuer Rating from stable to negative because of "the significant budget gap and liquidity pressures" resulting from the enactment of the Tax Cuts and Jobs Act of 2017.

The administration states this positive action reflects the steps taken by the government to stabilize its finances by cutting operational costs and increasing tax collections during Fiscal Year 2018.

Acting Gov. Josh Tenorio welcomed the news.

"Gov. Leon Guerrero and I also recognize the factors that led to the upgrade, which included the reduction of operational costs and collecting on taxes owed to the government," he said.  "Together with our Fiscal Discipline Team, we must remain focused on restoring stability to our government finances as well as strengthening the confidence of our bond issuers."

The Moody's report included factors that could lead to an upgrade, primarily the restoration of positive fund balances without the use of deficit financing and a notable improvement of the general fund financial performance.