Standard & Poor's Ratings Services changed its outlook to 'negative' from 'stable' for Pennsylvania's general obligation debt because of growing spending pressures, particularly for public pensions, and a slow-growing state economy, the agency said on Thursday.
S&P affirmed the 'AA' credit rating on the state's general-obligation debt, but said it could lower that rating a notch in the next two years if Pennsylvania does not enact pension reform.
Earlier this week, another credit rating agency, Moody's Investors Service, cut the state's credit rating to 'Aa2' from 'Aa1' and put its higher education system on review for a possible downgrade.
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