SEVERAL MUNICIPAL BONDS UPGRADED
Change in rating likely to reduce the cost of Anchorage’s debt
Contact: Sarah Erkmann
ANCHORAGE- Last week, a global rating agency upgraded several of the Municipality of Anchorage’s (MOA) bond ratings. Fitch Ratings (Fitch) provides the world’s credit markets with independent and prospective credit opinions, research and data.
After a thorough review, Fitch announced that the MOA’s General Obligation bond rating would be recalibrated upward. Prior to the recalibration, the MOA enjoyed an AA credit rating on its bonds. After the recalibration, the MOA’s credit rating is AA+. The improvement in the rating is likely to have a positive effect on the pricing of the Municipality of Anchorage’s debt, particularly when issuing Build America Bonds.
Fitch began the process of recalibrating certain U.S. public finance credit ratings in July 2008. They said the intent of the recalibration was to ensure a greater degree of comparability across Fitch’s global portfolio of credit ratings. The credit rating adjustments were made to denote a comparable level of credit risk between public finance and other sectors of the market.
“We are pleased to have received a positive adjustment to our credit rating,” said Lucinda Mahoney, chief financial officer for the city. “This will likely have a positive impact on the pricing of our debt in the taxable marketplace when selling Build America Bonds, mostly because many of these investors have not historically purchased our debt due to the tax exempt nature of the bonds.”
Additionally, Fitch made adjustments to the following credit ratings:
- AWWU, both the water utility and the wastewater utility, from AA- to AA, and
- CIVICVentures, from A to A+.