Thursday October 28, 2010
Bond refinancing saves more than $2.5 million;
Wall Street firms tout city’s strong financial management
Louisville Metro Government has among the nation’s best credit ratings for city governments based on reports released this week by the top three Wall Street credit rating agencies, Mayor Jerry Abramson announced today.
Standard and Poor’s Rating Services, Fitch Ratings and Moody’s Investors Services assigned the top ratings as part of Abramson’s $41 million bond refinancing that will save the city more than $2.5 million in interest payments.
“Most cities in America would love to have the kind of top-flight ratings that Louisville has earned,” Abramson said. “It’s a clear reflection of the strong fiscal management of our government and the diversity of our local economy that has allowed us to weather the economic storm better than most regions of the country.”
The bond refinancing conducted this week is part of the Abramson administration’s on-going efforts to run government more efficiently and effectively. In the past eight years, Abramson has reduced the size of the government workforce by nearly 20 percent while maintaining and expanding the city’s core services.
Fitch Ratings praised the city’s management in its AAA rating – the agency’s highest. “Financial performance has been generally stable, benefiting from strong management and solid economic growth,” Fitch wrote.
Moody’s Investor Services cited the Abramson administration’s “strong budget management” in awarding its second-highest rating, Aa1. Moody’s cited stable outlooks for several major employers, which affect the city’s occupational tax collections, as reason for a positive regional outlook in the midst of a slow national economic recovery.
Standard and Poor’s Rating Services gave Louisville Metro Government a AA+, its second-highest rating, citing “strong financial operations guided by strong management policies” as a key factor.
The agencies cited many positives in the local economy that makes Louisville stand out including:
· Deep, diverse economic base
· Continued population growth
· Above-average wealth
· Low debt-burden for city government
The rating agencies noted reason for optimism based on job expansion plans by local manufacturers including Ford Motor Co. and General Electric. Moody’s cited the city’s low costs and the presence of University of Louisville as a large research university as reasons to expect future economic growth.