City’s AAA bond rating reaffirmed for second time

Thu, 06/22/2017 - 14:45

The City of Winchester’s AAA general obligation bond rating has been affirmed again by Standard & Poor's Rating Services (S&P). The AAA rating was first assigned on October 7, 2013 (reaffirmed in October 2014) and is the highest credit rating that an entity can receive. Winchester is one of only eleven cities in Virginia to maintain a AAA rating.

Rating services provide these evaluations of a bond issuer's financial strength, or its ability to pay a bond's principal and interest in a timely manner. S&P evaluates economy, financial position, long term liabilities, and management when determining the rating. The 2017 ratings report cites “the City’s continued consistent strong financial performance and underlying economy supported by very strong management practices,” as justification for the ratings confirmation.

"Winchester City Council and senior leadership have done a tremendous job in establishing the solid financial foundation needed to obtain the prestigious AAA bond rating,” stated Kevin Rotty, the City’s Financial Advisor.

This high bond rating means a low cost of borrowing on the City’s property tax-supported debt which allows the City to maximize the amount of bond capacity for many of the City’s capital projects.

“Similar to a person’s credit score, the City’s bond rating reflects the City’s capacity to meet financial commitments,” explains the City’s Chief Financial Officer Mary Blowe. “The high bond rating means a low cost of borrowing on the City’s property tax-supported debt which allows us to maximize the amount we can borrow for future capital projects.”

For the community, a high bond rating means that there is a continued strong financial management program including long-range capital planning.

“We’re very proud to maintain the AAA bond rating and it will help save tax payers a significant amount of money when we refinance general obligation bonds or issue bonds for large projects in the future,” said City Manager Eden Freeman.  “Being exceptional stewards of the City’s funds is always a top priority and this bond rating confirms that unwavering commitment.”

Standard & Poor’s used four key factors to rate the City’s debt issues: economy, management, financial well-being and debt. See the attached report for more information about why the City of Winchester received the AAA rating.