Fitch explains state rating framework, reiterates Minnesota AAA stable

Eric Kim, an analyst at Fitch Ratings, told the Senate Capital Investment Committee on March 4 that Fitch maintains an issuer default rating of AAA with a stable outlook for the state of Minnesota and outlined how the agency reaches that view.

Kim said that "a rating is fundamentally Fitch's opinion on the likelihood and willingness of a borrower to repay its debts," and walked senators through Fitch's rating process, published criteria and several supporting reports Fitch provided to the committee. He described the AAA assessment for Minnesota as the result of high assessments on three of Fitch's key rating drivers and generally stable operating performance.

Fitch defines four principal rating drivers it reviews for states: the economic resource base, revenue framework, expenditure framework and long-term liability burden. For Minnesota, Kim said Fitch…