Strong S&P rating reflects city’s strong management and budget performance, agency’s report says.
St. Paul once again has received a AAA rating on its general obligation bonds from Standard & Poor’s rating house, the highest credit rating the agency offers.
The strong rating, which indicates that analysts believe the city’s financial house is in order, is important because it typically allows the city to borrow money for capital projects at a lower interest rate. Ratings measure the attractiveness of the city’s bonds for investors.
“We have made being good stewards of taxpayer dollars a priority, and Standard & Poor’s rating today reflects our … strong budget, strong economy and strong financial outlook,” Mayor Chris Coleman said in a statement released Thursday.
City Council President Kathy Lantry added that the rating was proof that the city’s “hard work … to build a strong budget year after year” was paying off.
Coleman took the oath of office Thursday at City Hall to launch his third term as mayor, following his landslide re-election in November.
A formal public ceremony will be held Friday at Union Depot.
The city has a number of bond sales coming soon, including $12.5 million for street reconstruction and enhancement, $11 million for capital improvements and $7 million for the library system.
Standard & Poor’s favorable report cited St. Paul’s strong financial management, a diverse economy, budget flexibility, a good fund reserve balance, favorable budget projections and strong liquidity.
Ratings for the city’s debt and its 2005 recreational facilities bonds were maintained at a slightly lower level, at AA+ and AA respectively. Financial outlook for all ratings judged stable.
The other bond house used by St. Paul is Moody’s, which rates the city’s bonds at Aa1, just below the top rating of Aaa.
Moody’s considers St. Paul’s bonds as high quality with very low credit risk.