Agencies Reaffirm Highest Bond Ratings for City of Alexandria

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Agencies Reaffirm Highest Bond Ratings for City of Alexandria

­­For Immediate Release: November 22, 2021

S&P Global Ratings and Moody’s Investors Service have reaffirmed the City of Alexandria’s top bond ratings of ‘AAA’ and ‘Aaa,’ respectively, before the City’s planned sale of $156.9 million in general obligation tax-exempt and taxable bonds to fund various capital projects and land acquisition costs, and refund select outstanding bonds for debt service savings.

“We are very proud that, once again, Alexandria has been recognized for its strong financial position, conservative budget practices and sound policies that govern our financial operations," said Mayor Justin Wilson. "Both agencies recognized the City’s extensive efforts related to environmental, social and governance factors or Environmental, Social and Governance (ESG) risks, including our flood mitigation projects, the electrification of the bus fleet and budget and policy initiatives that address income and racial inequities.”

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 2019, was slightly more than 2.2% over a 20-year period for $21.50 million of tax-exempt bonds. 

In reaffirming the City’s bond rating, Moody’s reflected a stable outlook for the City, noting its “financial position is sound and has had moderate growth in reserve and liquidity levels in recent years. Alexandria's fixed costs are manageable and will remain so despite future borrowing plans.” Moody’s also cited the City’s “adherence to comprehensive fiscal policies” as a credit strength, as well as the City’s ESG (environmental, social and governance) Credit Impact Score of 1 which is the highest attainable score. 

S&P recognized the City’s “very strong resilience throughout the COVID-19 pandemic. Timely management action underpinned this resilience and helped the City to achieve surplus results in fiscal years 2020 and 2021.” S&P also stated that the City’s strong economic growth “will help Alexandria continue implementing its comprehensive capital improvement plan (CIP) and will allow the City to continue cash funding a significant share of its capital needs.” The agency rated the City’s general obligation bonds “above the sovereign” bonds of the U.S Treasury because “the City can maintain better credit characteristics than the U.S. government in a stress scenario.”

“This is the first time the rating agencies have focused on ESG specifically, and City Council’s extensive actions related to climate change, equity and support of sound financial policies were recognized,” said City Manager Mark Jinks. 

For inquiries from the news media only, contact Andrea Blackford, Editorial Communications Manager, at andrea.blackford@alexandriava.gov or 703.746.3959.

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This news release is available at alexandriava.gov/125242.

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