Thursday, March 12, 2015
Cites Strong Credit, Pension Obligations, Response to Federal Downsizing
District Chief Financial Officer Jeffrey S. DeWitt announced today that Moody's Investor Service has upgraded the District of Columbia's General Obligation (GO) bonds to Aa1 from Aa2, one notch below AAA the highest level. The rating increase affects $2.8 billion of outstanding GO bonds. Concurrently, Moody’s raised the Tax Increment Funding (TIF) rating to Aa3, for $43.5 million of rated tax increment financing bonds.
DeWitt said, "This is a reaffirmation of the city’s strong financial management and institutionalized best practices. These are the highest bond ratings in the District’s history.”
DeWitt added, "This upgrade means that as we go into the market for additional capital financing, we will be able to continue to keep the cost of borrowing at the lowest possible level.”
Moody’s stated, “Financial governance is particularly strong, including multi-year financial plans, debt affordability analysis and mandated reserves, which provide a robust framework for the District to maintain a healthy financial position going forward.
“The general obligation upgrade to Aa1 reflects a variety of strong credit features and a degree of resilience in the District’s economy to federal downsizing. The District’s fund balances have continued to strengthen in recent years and are on a trajectory to continue to increase in the next several years. The District’s strong pension position and other-post employment benefit (OPEB) liabilities are low compared to most local governments.”
Here is the link to Moody’s report summary.
Mayor Muriel Bowser said, “I am very pleased that Wall Street recognizes our strong financial position. It is now our obligation to continue to manage our finances effectively while meeting the needs of all of our residents.”
Council Chairman Phil Mendelson stated, “Working with the mayor and the CFO, we have developed budgets and policies that keep us on sound financial footing and the council will continue to keep the city on the right financial path.”
Finance Committee Chairman Jack Evans said, “I have been telling the rating agencies for years that our bonds should have higher ratings. This ratings upgrade reflects the District’s strong and resilient economy.”