But it put off a decision on its long-term rating until after a new state budget is in place.

It is the long-term rating that most financial analysts look at in trying to determine a state's overall financial condition.

We have also removed both the short- and long-term ratings from CreditWatch negative.

"I would emphasize that we still have the long-term and short-term ratings at investment-grade level," he added.

The long-term ratings rose to B- and the short term to C, both from selective default.

This is in contrast to long-term rating which is evaluated over a long timeframe.

In the past institutional investors preferred to consider long-term ratings.

The change means the agency is more likely to lower its long-term rating of BBB+ for the unit.

From 1995-2007, 81 percent of stocks with long-term ratings of 10 increased in price one year later.

"At a certain point these conditions may have to become part of our long-term rating."