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October 3, 2007

2 bond rating agencies give Providence an 'A'

PROVIDENCE -- The city is getting all A's -- from two agencies that rate communities' ability to borrow money on the bond market.

Moody’s Investment Services and Standard & Poor’s each gave the city "A" bond ratings, which Mayor David N. Cicilline's office today touted in a news release as a result of "rapidly expanding tax base, strong management practices and progress towards reduced the unfunded pension liability" cited in the agencies' reports.

“We’ve worked hard over the past four-and-a-half years to create a strong business climate for potential investors and to improve the City’s financial health,” Cicilline said in the statement. “Top grades from Wall Street make it easier for the city to borrow money at a lower rate, resulting in significant savings for taxpayers.”

Moody’s gave “A” ratings to two Providence Public Building Authority bonds for Building a Legacy school construction, Series 2007-A ($75 million) and Series 2007-B ($15.6 million). They will finance projects, including renovations to the Hanley Vocational Building and Central High School, building an indoor physical education and sports complex, and to refund outstanding debt.

Moody’s investors reports states “the city’s financial position will continue to benefit from prudent fiscal management and conservative budgeting” and lauded the city’s progress at paying for pensions at 100% of actuarially recommended levels, the mayor's office said, adding that the city won praise for "responsibly maintaining cash reserves for the third consecutive year."

The mayor's office characterized Standard & Poor’s report as praising Providence’s position "as an economic driver for Rhode Island."

-- projo.com staff writer Michael P. McKinney

Posted by Mike McKinney  at 3:18 PM | Permalink

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