Credit rating upgraded
An credit report upgrade described by officials as “significant,” could mean savings in future projects.
Moody’s Investor Service upgrades the city’s credit rating to Aa2, up two categories from the previous rating of A1, in place since July 2009. The new rating allows the city to market its bonds at a much lower interest rate, which lowers the cost of projects financed through bonds.
These lower interest rates mean it costs the city less to do many projects.
“This news is a result of our council and city employees working together through tough times to put us in strong financial shape,” Mayor Paul Finley said. “We are in a position now to capitalize on lower interest rates which translates to more bang for the taxpayer buck.”
The Aa2 rating and upgrade reflect a strong capacity to meet financial obligations and a high investment grade. The city also enjoys a high Standard and Poor’s rating of AA, one category away from the best rating that can be achieved. The city is now only two steps from the highest credit rating possible.
Factors which affect a municipality’s credit rating are: debt management, management and leadership, financial performance, economic development and growth, demographic factors and innovations.
Finance Committee Chair Larry Vannoy said he is pleased with the rating.
“We are very proud that Madison received such a significant upgrade to our bond rating given the tough economic climate the nation is facing,” he said. “It is a reflection of the hard work and dedication of the City Council, Mayor and all city employees to provide our community with top quality services while being financially prudent.”
Only nine other cities in the state have achieved this high of a combined rating, putting Madison in the top 2 percent of the state.