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STANDARD & POOR'S ASSIGNS HIGHEST RATING
TO THE MUNICIPALITY OF ANCHORAGE
I'm pleased to announce that the rating agency Standard & Poor's (S&P) has raised the Municipality's general obligation rating from AA+ to AAA, the highest rating possible by S&P. This rating reaffirms S&P's confidence in the city's financial management and its economic outlook.
The AAA rating will save taxpayers money in the form of reduced interest expense on the bonds that the Municipality issues going forward, including the school bonds we anticipate selling this month.
This action by S&P continues to demonstrate that investors have the highest level of confidence in the Municipality of Anchorage.
Just a year ago, S&P raised the Municipality's general obligation rating from AA to AA+, a ratings boost that only a handful of cities received.
The improved rating came after Chief Fiscal Officer Lucinda Mahoney, representatives of the Municipality's financial advisor, First Southwest Company and I met in San Francisco with the S&P rating analysts to review the Municipality's finances in anticipation of a general obligation bond issue in September 2013. The review included an analysis of the Municipality's finances, management and the state of Anchorage's economy including Anchorage's relationship to the entire State of Alaska.
In the current S&P review dated Oct. 30, 2013, the rating analysts noted the continued improvement in the fund balance policy and further diversification of the Municipality as the economic center of the State of Alaska.
Specifically the report cited:
- Very strong management conditions with strong policies
- Very strong budgetary flexibility
- Adequate budgetary performance with a stable revenue base
- Very strong, broad and diverse economy
- Very strong liquidity providing very strong cash levels to cover both debt service and expenditures and
- Adequate debt and contingent liabilities position.
I want express my sincere gratitude to the directors, managers and employees of the Municipality, who have established and maintained a thrifty and fiscally conservative environment throughout the Municipality. The veteran leadership with regard to budgetary and fiscal policy management has made this fantastic achievement possible.
We are extremely delighted that S&P has continued to recognize and reward Anchorage for the improvements in the Municipality's finances and the strength of the local economy over the past several years. This is truly a noteworthy event considering the economic times since the Great Recession of 2008 during which many local governments have been downgraded.
The credit upgrade is significant as few cities are receiving upgrades to AAA during these challenging fiscal times. There are roughly 4,000 local governments rated by Standard & Poors and the Municipality of Anchorage is one of only 338 currently rated AAA.
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