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Paying 38 Studios debt took RI off S&P CreditWatch list, House speaker says

Paying 38 Studios debt took Rhode Island off of credit rating agency Standard & Poor's CreditWatch list, House Speaker Nicholas Mattiello said.

S&P removed Rhode Island from the list last Wednesday, Portsmouth Patch reports. S&P uses the list to "indicate a substantial likelihood of it taking a rating action within the next 90 days, or in response to events presenting significant uncertainty to the creditworthiness of an issuer," according to the agency.

"This affirmation from S&P shows that our decision was sound and will ensure protection of the state’s investments and reputation," Mattiello said. "When Majority Leader John DeSimone and I met with the ratings agency last month, there was a clear indication from Moody’s and from S&P that refusal to make the bond payment would result in a ratings downgrade."

Mattiello has been a vocal proponent of repaying the debt incurred from the state's failed $75 million loan guarantee to video game developer 38 Studios. The House Speaker met with representatives from S&P last month to discuss repayment.

"We need to pay to protect the credit rating of Rhode Island," Mattiello said at the time. "I am not going to put Rhode Island on the default list. The reputation of the state will not be harmed any further."

A study preformed by SJ Advisors and commissioned by The Rhode Island Department of Administration concluded in early May that not paying the debt could reduce the state's bond rating to junk status. Rhode Island made a $2.4 million payment on the debt just before the report was released.

Former Red Sox pitcher Curt Schilling's 38 Studios declared bankruptcy in 2012. Since its failure, state lawmakers have also discussed defaulting on the debt. The newly appointed chairwoman of the Rhode Island House Committee on Oversight, Rep. Karen MacBeth, twice proposed legislation to prevent continuing payments.

You can follow along with the continuing story of 38 Studios and Rhode Island's response to its demise in Polygon's StoryStream.