City of Richmond moves up in general obligation debt rating
Moody’s designates it as a second-to-highest creditworthy entity.
Moody’s Investors Services upgraded the city of Richmond’s general obligation debt rating to Aa1, its second-to-highest creditworthiness rating, Richmond Mayor Levar Stoney announced Tuesday.
A city’s credit rating determines the amount that a locality may borrow for capital projects, including schools.
The city has not received an upgrade since 2014. With this change in rating, the city’s credit is in the highest standing of the past 50 years. According to Moody’s report, factors that could lead to an upgrade include significant and sustained growth of reserves and liquidity, reduction in debt and pensions and resident income level improvements.
“I am pleased that Wall Street continues to recognize the progress our city has made in recent years,” Stoney said in a statement. “We got our financial house in order, and it’s paying off.”
In July 2018, Richmond’s outlook was changed from “stable” to “positive,” due to growth, a more diverse tax base, additional reserves and a conservative budget, according to Moody’s.
Moody’s Investors Services provides credit ratings, research and risk analysis for sovereign nations, nonfinancial corporate insurers, financial institution insurers, public finance insurers, finance transactions and project finance insurers. Moody’s Corp. employs approximately 12,300 people in 42 countries. It reported $4.2 billion in revenue in 2017.