(Washington, DC) Chief Financial Officer Natwar M. Gandhi announced that Standard and Poors (S&P) has raised the Districts bond rating to A+ from A - the highest rating ever for the Districts borrowings. S&P said the increased rating is based on conservative financial management and operations, coupled with significant tax base growth and investment. S&P issued its rating on Wednesday.
"This is very, very good news, said Mayor Anthony A. Williams. At a time when our country as a whole faces economic uncertainty, the city continues to gain the confidence of Wall Street, and thats something we can all be proud of.
The District will issue $335 million in new general obligation bonds on Tuesday. The bonds will carry the new A+ rating, as will $120 million in refunding bonds also set for sale next week.
On Monday, Moodys Investors Service raised the Districts rating outlook to positive from stable, citing continued fiscal discipline provided by the independent CFO position. Earlier, Fitch Ratings had assigned an A rating and maintained its positive outlook for the Districts $3.4 billion debt portfolio and pending issuances. Fitch upgraded the District to an A earlier this year.
All three rating agencies cited the Districts economic strength in property value growth, low office vacancy rates and the high volume of new construction and development. The rating agencies also cited the Districts nine consecutive balanced budgets and very healthy growth in reserve funds.
The Council knows the importance of these periodic report cards from Wall Street, said Council Chair Linda W. Cropp. Weve been working hard to keep our grades high and to reward the District with investors confidence.
Council Committee on Finance and Revenue Chair Jack Evans said the ratings improvements come at a good time. This will help us to lower our financing costs and, in turn, spend more on capital projects.
This is what we work for, said Gandhi. We are very proud of the rating agencies optimistic outlook on the Districts financial future, and at the same time we recognize that we must work hard to maintain their confidence.