The city is expected to issue bonds next week
LEXINGTON, Ky. (WTVQ) — Once again, the nation’s two bond rating agencies, Standard & Poor’s Global Ratings and Moody’s Investors Service, have affirmed Lexington’s AA bond rating with a stable outlook.
“This bond rating reflects strong fiscal management and a resilient economy,” Mayor Linda Gorton said. “We are in a pandemic that is in its third year, and even so, our economy is healthy and growing. Our unemployment rate has fallen to near-record lows. New businesses are moving here and local businesses are growing.
Reaffirming a stable outlook, Moody’s noted Lexington’s “broad and growing tax base” and the presence of the University of Kentucky, which provides “stability.”
Standard & Poor’s cited the expansion of some of the city’s largest employers and the rebound in fiscal performance.
The announcements mean Lexington will be able to continue borrowing money at a low rate. The City plans to borrow $31.6 million to finance various projects that have been approved in the current budget. A downgrade in the city’s bond rating would have driven interest rates higher. These bonds are tentatively scheduled for February 17.
Going forward, rating agencies stressed the importance of restoring liquidity buffers, tightly managing debt issuance and managing repo increases.
“As we continue to manage our finances carefully and cautiously, the future looks bright,” Gorton said.
Rating levels include:
- AAA. Better credit quality. “AAA” ratings denote the lowest expectations of default risk.
- YY. Very high credit quality.
- A. High credit quality.
- BBB. Good credit quality.
- BB. Speculative.
- B. Highly speculative.
- CCC. Substantial credit risk.
- CC. Very high levels of credit risk.