Oct. 25—Things could be looking up for New Mexico's bond ratings for the first time in more than a decade.

Moody's Ratings, a national bond credit rating institution, released a credit opinion last month updating New Mexico's issuer and general obligation bonds from stable to positive.

Moody's believes the state's financial position "will remain strong and operations will be supported by balanced budgets and elevated reserves."

The credit opinion highlighted "proactive and conservative" fiscal, debt and pension management, strong general fund reserves, liquidity and revenue diversification through permanent funds and a rapid payout of net tax-supported debt as New Mexico's strengths.

The challenges, according to the opinion, are low industrial diversity — the state's economy is highly reliant on the oil and gas industry and federal government — below-average socioeconomic profile and population trends, indirect responsibility for K-12 pension liabilities and above-average environmental risks.

"While certain economic challenges will persist, these fiscal strengths, along with further stabilization of long-term liabilities following increased pension contributions, could support an improved credit rating," the credit opinion stated.

Moody's will consider upgrading the state issuer, general obligation and severance tax bonds in the next 12-18 months if the state maintains its strong fiscal practices, according to a Tuesday news release from the New Mexico Department of Finance and Administration.

"This new national report is great news that demonstrates we're making sound fiscal decisions that will benefit New Mexicans for years to come," Gov. Michelle Lujan Grisham said in the news release. "It's clear that our fiscal strategy is working, and we'll continue to make smart investments and prepare for the future."

The state doesn't plan to issue long-term severance tax bonds for the foreseeable future because of "strong revenue and financial investments," according to the DFA.

DFA Secretary Wayne Propst said in the news release the improved bond ratings are a result of reducing long-term debt issuance, maintaining operating reserve balances of more than 30%, stabilizing long-term pension liabilities and increasing permanent fund balances.

"The improved bond rating outlook by Moody's reflects the administration's strong fiscal governance on several fronts," Propst said.