City Retains Top Bond Ratings

City Retains Top Bond Ratings

S&P Global Ratings and Moody’s Investors Service have reaffirmed the City of Alexandria’s top bond ratings of ‘AAA’ and ‘Aaa,’ respectively, before the City’s planned sale of $156.9 million in general obligation tax-exempt and taxable bonds to fund various capital projects and land acquisition costs, and refund select outstanding bonds for debt service savings.

"Both agencies recognized the City’s extensive efforts related to environmental, social and governance factors or Environmental, Social and Governance (ESG) risks, including our flood mitigation projects, the electrification of the bus fleet and budget and policy initiatives that address income and racial inequities,” said Mayor Justin Wilson.

Alexandria has maintained the highest grades from both major bond rating agencies since 1992, which enables the City to pay very low interest rates for the life of bonds issued to fund major projects. The interest rate for the City’s most recent bond sale, in 2019, was slightly more than 2.2% over a 20-year period for $21.50 million of tax-exempt bonds. 

In reaffirming the City’s bond rating, Moody’s reflected a stable outlook for the City, noting its “financial position is sound and has had moderate growth in reserve and liquidity levels in recent years. Alexandria's fixed costs are manageable and will remain so despite future borrowing plans.” Moody’s also cited the City’s “adherence to comprehensive fiscal policies” as a credit strength, as well as the City’s ESG (environmental, social and governance) Credit Impact Score of 1 which is the highest attainable score. 

S&P recognized the City’s “very strong resilience throughout the COVID-19 pandemic. Timely management action underpinned this resilience and helped the City to achieve surplus results in fiscal years 2020 and 2021.” S&P also stated that the City’s strong economic growth “will help Alexandria continue implementing its comprehensive capital improvement plan (CIP) and will allow the City to continue cash funding a significant share of its capital needs.”