The City of Madison has received a significant upgrade in its credit rating from Moody’s Investors Service. The upgraded credit rating is now Aa2, enhanced two categories upward from the previous rating of A1 which was an upgrade in July of 2009. This new rating enables the city to market its bonds at a much lower interest rate, which lowers the costs of projects financed through bonds. This provides a real savings for the city and its residents.
“This news is a result of our council and city employees working together through tough times to put us in strong financial shape,” said Mayor Paul Finely. “We are in a position now to capitalize on lower interest rates which translates to more bang for the taxpayer buck.”
The Aa2 rating and upgrade reflect a very strong capacity to meet financial obligations and a high investment grade. The City also enjoys a high Standard and Poor’s rating of AA which is one category away from the best rating that can be achieved. The city is now only two steps from the highest credit rating possible.
Factors which affect a municipality’s credit rating are:
• Debt management
• Management and Leadership
• Financial Performance
• Economic Development / Growth
• Demographic Factors
• Innovations
Finance Committee Chair Larry Vannoy said he is pleased with the rating.
"We are very proud that Madison received such a significant upgrade to our bond rating given the tough economic climate the nation is facing," he said. "It is a reflection of the hard work and dedication of the City Council, Mayor and all city employees to provide our community with top quality services while being financially prudent."
Only 9 other cities in the state have achieved this high of a combined rating which puts Madison in the top 2%.