City of Albuquerque Earns Enhanced Combined Bond Ratings with Praise
March 29,2019
S&P Global Ratings and Fitch Ratings, two of the nation’s premier credit rating services, have issued ‘AAA’ and ‘AA+’ bond ratings, respectively, both with a “Stable outlook”, to the City of Albuquerque’s 2019 A and B General Obligation (GO) bonds. The Series A bonds will be used to invest in public safety, public transportation, and other public facilities and the Series B bonds will be used to upgrade storm water drainage, flood control, and sewer systems.
The GO Bonds are scheduled to sell for a total of $33,800,000 on April 3rd. Series 2019A are tax-exempt bonds valued at $14,308,000, Series 2019B are tax-exempt bonds valued at $12,342,000 and Series 2019C are taxable bonds valued at $7,150,000 that will be privately placed through the New Mexico State Treasurer. Series 2019A and 2019B will be sold competitively.
S&P’s report praised the City's management as “very strong, with strong financial policies and practices under Financial Management Assessment (FMA) methodology, indicating financial practices are strong, well embedded, and likely sustainable”.
“We consider Albuquerque's economy strong…The City's economic base is diverse and continues to attract new businesses.” – S&P Global, Ratings Direct
“Management matters in City Hall because it means your tax dollars can go a lot further toward tackling big challenges like public safety and infrastructure. We are making progress with this improved bond rating and will continue our efforts building a strong economy.” – Mayor Tim Keller
“The 2019 combined rating from S&P Global and Fitch is much better than the 2018 combined rating from S&P Global and Moody’s. With this enhanced combined rating, along with the balanced budget to be submitted to City Council on April 1st, the City is in an advantageous position to issue the bonds.” – Sanjay Bhakta, Chief Financial Officer, City of Albuquerque
Main takeaways:
- The City of Albuquerque is the primary economic driver for the state and is positioned to continue experiencing slow and steady job and population expansion.
The City's strong management practices support stable financial reserves and balanced operations by taking advantage of revenue opportunities to offset growing expenditure pressures. Although annual debt issuances are expected, the overall net debt is expected to remain moderate due to fast debt repayment and tax base growth.