Mayor James J. Fiorentini > Press Release
For Immediate Release, Tuesday, October 31, 2006
Mayor Announces City Bond Rating Is Up – 2 nd Year in A Row
Mayor James J. Fiorentini today announced that, for the second year in row, two Wall Street Financial firms Monody’s has raised the City’s bond rating. Mayor Fiorentini labeled this “great news for the city, and “a positive report card from Wall Street Financial analysts that the city is headed in the right direction.” Fiorentini said he expected Standard and Poor’s to follow suit tomorrow and also raise the bond rating.
The bond rating determines the interest rate that the City is allowed to borrow money. Two years ago the city’s bond rating stood tied with Springfield’s for the lowest in the state at Baa3. Last year, Monody’s raised the bond rating to Baa2 because of the improvement in the City’s financial picture.
This year, for the second year in row, Moody’s again raised the bond rating, this time to Baa1 with a positive outlook. Moodys cited the improvement in the City’s financial picture over the past two years. Fiorentini said he expected Standard and Poor’s to raise the rating from BAA to A1. Standard and Poor’s credited the city’s financial management and gave the city its strongest management rating.
Monody’s noted the strict financial control measures put into effect by the Fiorentini administration including hiring freezes, healthcare changes and strict cost controls. Moody’s noted that the City’s tax base continues to grow and cited Target, Lowe’s Home Goods Store and BJ’s Wholesale Club as examples of the City’s improved financial picture. Moody’s also noted that the City is concentrated on transit-orientated development downtown and that several former manufacturing buildings are being refurbished.
Moody’s noted that:
“Moody’s expects the City’s financial picture will continue to improve….”
In making the announcement, Mayor Fiorentini called this a report card from Wall Street that we are headed in the right direction.
“This is financial report card shows we are headed in the right direction. The credit for this increase goes to the dedicated and hard working employees of this city. Their hard work and sacrifice made this happen.
While this is certainly an indication we are headed in the right direction, it is also clear that we need to continue in the strong fiscal discipline which brought us to this point.”
Fiorentini said that the improvement means that for every million dollars the city borrows, the city will save approximately $30,000 in interest charges. If the city elects to borrow $1 million for new technology for the high school, there will be an immediate savings of approximately $30,000. In the bonding for the high school project, set in the next year or two, Fiorentini said the city could save as much as $200,000 as a result of the new bond rating.
Graphic: bond rating up two years in a row!
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