WASHINGTON, DC - The strength and stability of the District of Columbia's financial recovery was confirmed today, when Standard & Poor's Corporation raised its ratings on the city's outstanding general obligation debt to investment grade status. The ratings were raised from BB to BBB with a stable outlook.
"Every citizen of the District will reap the benefits of today's upgrade," said DC Mayor Anthony A. Williams. "The revenues that this upgrade will bring can mean lower taxes, better services and a greater investment in children and youth. This city has come farther and faster in its financial recovery than any other municipality coming out of a financial crisis. I extend my congratulations to the District's financial management team."
Standard and Poor's based the upgrade on the District's "improved financial and administrative factors," effects of the Revitalization Act and the DC Financial Responsibility and Management Assistance Act.
"Confidence in the District government's management and financial responsibility is growing," said DC Council Chairman Linda Cropp. "The city is establishing a track record of balancing the budget, improving service delivery and making capital improvements."
Standard and Poor's cited the District's "substantial progress in improving its financial performance." The agency said that improved financial control and monitoring, revenue collections, eliminating deficits, budgetary performance and investment in technology were all key to the upgrade.
"The upgrade by Standard and Poor's represents the combined efforts of the DC Council, the Financial Authority and the Federal government," said Interim Chief Financial Officer Earl C. Cabbell. "The solid investment grade rating also reflects three years of effort by the Office of the Chief Financial Officer leading to the elimination of the accumulated deficit and substantial surpluses in Fiscal Years 1997 and 1998."
According the Deputy CFO for Finance and Treasury Thomas F. Huestis, some of these improvements have already been seen in reduced interest rates. The District is expecting to go to market in June with a $500 million bond issue for new capital projects and refinancing. "The ratings upgrade will save the District millions of dollars in reduced interest cost, lower bond insurance cost and lower underwriting fees," said Mr. Huestis. "These savings may allow the District to improve services and reduce tax rates in the future."