Roseburg maintains high credit rating
ROSEBURG, Ore. – The City of Roseburg has maintained its high credit rating with a leading bond credit rating business.
On Thursday, Nov. 17, Moody’s Investor Service, a leading provider of credit ratings for public finance issuers, issued its annual comment on the City of Roseburg and confirmed its credit rating for the City as an Aa3 with no outlook.
An “Aa” rating signifies that obligations of the entity – in this case, the City -- are judged to be of high quality and are subject to very low credit risk, according to Roseburg Finance Department Director Ron Harker.
“Maintaining an ‘Aa3 with No Outlook’ with Moody’s is something to be proud of,” said Harker. “The big win here is that we have been able to maintain an Aa3 rating (High Quality) as we begin to absorb the difficulties of a slowing economy and high inflation.”
Credit rating agencies such as Moody’s are essentially assessing the potential “risk of default” that a bond issuer will be unable to pay interest or principal on the debt when they issue their rating scores. Investor, portfolio managers and bankers are the primary users of credit rating scores, Harker explained.
Bonds/debt that are traded on the open markets carry a credit score which is the underlying issuer’s credit score and changes as the credit rating of the issuer changes. The higher the score, the lower the risk of default. Ratings range from the highest to lowest: AAA, AA, A, BBB, BB, B, CCC, CC, C and D. AAA ratings represent the highest quality and grade. AA (which the City has earned) represents high quality, or high grade, Harker said.
For a bond/debt issuer like the City, a higher credit rating will translate into lower interest rates on the debt that they issue and that can translate into significant savings over the life of the bond/debt. For this reason, the City’s “Debt and Investment Management Policies” state, “The City will seek to maintain and if possible improve its current “A” bond rating so its borrowing costs are minimized and its access to credit is preserved.”
With an Aa3 rating, the City is in full compliance with it goals and policies, said Harker, adding the City has been able to maintain an Aa3 credit rating for a number of years now.
Credit Rating Scores can also serve as a way of determining the relative financial health of an entity and thereby convey relative financial strength to a governing board or, in this case, Roseburg residents.
Posted by RoseburgAdmin