Excellent Credit Rating Means City Can Borrow Money at the Lowest Interest Rates for Capital Projects to Improve Durham
The City of Durham has just been affirmed with a AAA rating on its general obligation (GO) bonds from the top three international credit rating agencies, meaning the City is extremely capable of meeting its financial commitments and can borrow money at the lowest interest rates to fund large capital projects to improve the community.
What You Need to Know
- City affirmed with AAA general obligation (GO) bond ratings from Fitch Ratings, Moody’s, and S&P Global Ratings.
- City also affirmed with limited obligation bond (LOB) ratings of AA+ from Fitch Ratings, Aa1 from Moody's, and AA+ from S&P Global Ratings.
- City plans to issue $138 million in limited obligation bonds in October to fund citywide capital projects.
In addition to receiving the highest possible ratings from Fitch Ratings, Moody's, and S&P Global Ratings for its GO bonds, the City also received excellent limited obligation bond (LOB) ratings of AA+ from Fitch Ratings, Aa1 from Moody's, and AA+ from S&P Global Ratings.
“Durham is still one of only a handful of U.S. cities to have such an excellent rating by all three agencies. It’s not an easy accomplishment, but it allows us to borrow money at the lowest interest rates to enable us to spend millions to upgrade our roads, improve our neighborhoods, and build facilities and other vital infrastructure that supports our quality of life and makes us a great place to live, work, and play,” said City Manager Wanda Page.
The bond rating is an important process because the rating provides information for investors as to the quality and stability of the bond. A high credit rating also allows the City to borrow money at lower interest rates and save taxpayers’ money. The independent rating agencies issue their ratings based on factors like future tax revenue, population growth, and the amount of debt outstanding.
This month’s credit rating issuance by these three agencies comes as the City plans to issue approximately $138 million in LOBs to provide funding for various citywide capital projects, such as the Public Works Operations Center renovations, Fire Station #19, and the Hoover Road Athletic Park.
For more information about the City’s AAA rating, contact Finance Director Tim Flora by email.
About the City of Durham Finance Department
The Finance Department assists the City Council, City Manager, and City Departments with the management of financial resources and activities including debt and cash management, payroll, vendor payment, financial reporting, purchasing, general billing and revenue collection. Finance staff also coordinate risk management activities such as claims administration and employee safety programs.