Moody’s Investors Service Affirms Burlington’s “A” Credit Rating and Improves Future Outlook from Stable to Positive

Cites prudent, balanced operations and fiscal responsibility

Burlington, VT – Moody’s Investors Service revised the City of Burlington’s outlook to positive and affirmed the City’s A3 credit rating on Monday (please see Burlington ratings table below). In its Credit Report, Moody’s stated “The city remains committed to improving its financial position and has generated four consecutive surpluses (audited 2013-2016). Management adheres to the fund balance policy adopted by the Council in 2015 and has been budgeting $1 million annually for reserve replenishment. The policy targets an unassigned fund balance of 10-15%, and the city achieved that in fiscal 2016, well ahead of schedule.”

 

“Moody’s improved outlook validates the City’s recent financial achievements, and is an indicator of likely future progress,” said Mayor Miro Weinberger.  “The City’s credit rating is particularly important to taxpayers and ratepayers at this time as we are bonding to implement our major infrastructure plan – we will remain focused on and committed to responsible stewardship of the City’s finances.”
Highlights from the Moody’s report include:

  • “Management team budgets conservatively and prudently manages expenditures, leading to recent growth in reserves.”
  • “The revision of the outlook to positive reflects our expectation that the city will maintain structurally balanced operations and modestly improve its reserve levels, as it has done for the past few years, despite rising costs for debt service, salaries, and employee benefits.”

 

Future actions that could lead to another rating upgrade:

  • Continued surplus operations and material growth in reserves and liquidity
  • Final resolution of BT sale

Moody’s Investors Service Affirms Burlington’s “A” Credit Rating and Improves Future Outlook from Stable to Positive

Source: Moody’s Rating Reports

Global Long-Term Rating Scale
Rating Symbols and Definitions
Aaa Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk.
Aa Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.
A Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.
Baa Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.
Ba Obligations rated Ba are judged to be speculative and are subject to substantial credit risk.
B Obligations rated B are considered speculative and are subject to high credit risk.
Caa Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk.
Ca Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.
C Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery of principal or interest.

Source: Moody’s Investors Service Rating Symbols and Definitions, February 2016, https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004

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