Rating Agencies Reaffirm Alexandria’s Bond Ratings
Standard & Poor’s and Moody’s Investors Service have reaffirmed the City of Alexandria’s bond ratings of AAA and Aaa, respectively. The City has maintained these top grades from both major bond rating agencies since 1992.
Bond ratings (expressed in letters from “AAA” to “C”), are grades given to bonds that indicate their credit quality. Private independent rating services provide these evaluations of a bond issuer’s financial strength, or its ability to pay a bond’s principal and interest in a timely manner.
In reaffirming the City’s AAA bond rating, S&P cited the City’s “[d]eep, diverse, and strongly performing local economy, which serves as one of the anchors of the greater Washington and northern Virginia regions,” “strong financial management,” as well as a “low debt burden for debt-to-market value.” S&P also rated the City’s financial management practices “strong,” which is the highest rating given in the financial management category. “We believe the city will likely maintain its strong reserves and strong financial oversight.”
S&P gave the City a “stable” outlook, owing to the City’s “very strong and diverse local economy, strong financial management, and moderate-to-low debt.”
Moody’s assigned the City a “negative outlook,” based on its “indirect linkages to the weakened credit profile of the U.S. government,” for the second year. In August 2011, Moody’s announced that 161 Aaa-rated local governments, including the City of Alexandria, were assigned a “negative outlook” due to indirect and direct financial and economic relationships of these localities with the federal government.
In reaffirming the City’s Aaa bond rating, however, Moody’s Investors Service stated that the “Aaa rating reflects the city's strong and vibrant tax base, sound and stable financial condition, conservative budgeting and favorable debt profile,” and cited Alexandria’s “large and wealthy tax base with proximity to DC,” and a “conservatively managed budget with sound reserves.”
“This positive response from the rating agencies is a reflection of the City’s strong financial management, as we continue to work together to ensure a sustainable economy for our city,” said Mayor William D. Euille, “Regardless of the state of the nation’s economy over the past several years, Alexandria has been able to maintain our longstanding, solid financial reputation, and we are extremely proud of the consistently high bond ratings to affirm it.”