Agencies Reaffirm Highest Bond Ratings for City of Alexandria
For Immediate Release: November 26, 2019
S&P Global Ratings and Moody’s Investors Service have reaffirmed the City of Alexandria’s top bond ratings of ‘AAA’ and ‘Aaa,’ respectively, in advance of the City’s planned sale of $205 million in general obligation tax-exempt bonds to fund the Potomac Yard Metrorail Station and school facility capital projects.
“We are very proud that once again, Alexandria has been recognized for its healthy financial position, conservative budget practices and strong policies that govern our financial operations," said Mayor Justin Wilson. "As we look to the future, we are pleased that both rating agencies acknowledged the City’s efforts to advance cyber security initiatives and environmental protections.”
Alexandria has maintained the highest grades from both major bond rating agencies since 1992, which enables the City to pay very low interest rates for the life of bonds issued to fund major projects.The interest rate for the City’s most recent bond sale, in 2018, was just under 2.9% over a 20-year period for $40.9 million of tax-exempt bonds.
In reaffirming the City’s bond rating, Moody’s reflected a stable outlook for the City, noting “the likelihood that the City will maintain its healthy financial position given strong operating trends and conservative budgeting practice.” Moody’s also cited the City’s “very strong management” as a credit strength. S&P recognized the transit-oriented focus of economic development efforts in Potomac Yard and Oakville Triangle, as well as the redevelopment focus on the waterfront, which “supports the City’s strong tourism industry.” The City’s debt policy and affordability metrics contributed to S&P’s recognition of the City’s “financial practices that are strong, well-embedded and likely stable,” specifically noting City Council’s recent action to raise the threshold of spendable fund balance from 10 to 15% of general fund revenue.
S&P Global Ratings rated the City’s general obligation bonds higher than U.S. Treasury bonds because “the city can maintain better credit characteristics than the U.S. [government] in a stress scenario.”
For media inquiries, contact Andrea Blackford, Senior Communications Officer, at email@example.com or 703.746.3959.
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This news release is available at alexandriava.gov/112576.