Standard and Poor’s Rating Services has raised the city of Waxahachie’s rate on general obligation debt two notches to A+ from A- .
According to information released from Standard & Poor’s, the rating increase was “based on the city’s very strong historical and projected financial position and good financial management.”
This month, the city will issue $10.2 million in bonds to construct the downtown parking garage, lengthen the runway at Mid-Way Regional Airport and restore the historic MKT train depot. The bond proceeds will also fund the construction and improvement of streets and other city facilities.
The Standard & Poor’s rating increase comes as a positive sign in the current economic downturn.
“When we received the news that the city’s rating had increased, it was definitely an encouraging sign during this downturn,” City Manager Paul Stevens said. “We were optimistic that our rating would hold, but having it increase two notches to an A+ was a very pleasant surprise.”
The city’s role as a regional economic and retail center contributed to the rate increase, also noted in the report issued by Standard & Poor’s, which also indicates the city has maintained healthy household income levels and has an increasing retail presence in the southern portion of the Metroplex.
Moody’s Investors Services maintained the city’s rating of A2, which is the same rating the service previously assigned the city. The rating assignment “reflects the city’s favorable assessed valuation growth,” according to information released by Moody’s.
The increase in the city’s bond rating not only offers a stable option to investors, but also translates into savings for the city. With a higher bond rating, the city will receive a lower interest rate on the bond funds. After the increase, the city’s interest rate on the funds is 4.25 percent. Compared to the national average or 4.89 percent, the city will save an estimated $855,000 over the life of the 20-year debt.