City Of Tucson’s Positive Bond Ratings Affirmedby Michael Carson on Jun. 02, 2011, under Uncategorized
Three separate bond rating agencies have recognized the City of Tucson’s efforts to cut spending and enhance revenue by maintaining the City’s rating levels for the sale of bonds. Standard & Poor’s, Moody’s Investors Service and Fitch Ratings this week issued their ratings for the City’s General Obligation Bonds, Certificates of Participation, Water Bonds and Highway User Revenue Fund (HURF) Bonds.
“Over the last few years, the City of Tucson has had to make some very difficult budget decisions and the fact that the City was able to maintain its rating position is quite an accomplishment,” said Kelly Gottschalk, Chief Financial Officer for the City of Tucson.
While no changes were made to the rating levels, five of the future outlooks were adjusted. Fitch revised the outlook to stable from last year’s negative outlook for the City’s General Obligation Bonds, Certificates of Participation and Water Bonds. An “outlook” assigned from a rating agency indicates the opinion of the rating agency of the likely direction of the issuer’s credit rating over the medium term. In its report, Fitch stated that improving the City’s outlook to stable results from “a stabilization in the City’s financial profile as spending reductions and revenue enhancements have significantly narrowed a structural budget gap and contributed to a better than expected operating results in fiscal 2010.”
Moody’s did change the City’s outlook on HURF senior and junior bonds from stable to negative, which reflects the sizable revenue loss from the state’s budget actions.
“The fact that we were able to move from a negative to a stable outlook for the City’s general and water credits is a significant move, especially in this tough economic environment,” Gottschalk said. “Although not out of the woods yet, the difficult changes that have been implemented to respond to this new economic reality are making a difference and improving the overall stability of the City’s financial position.”