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  • Bond Rating 060111

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    Richard G. Fimbres
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    The three main bond rating agencies affirmed the City of Tucson's bond ratings after the city cut spending and increased revenues to narrow its budget gap. While the rating levels were maintained, Fitch revised the outlook to stable from negative for several of Tucson's bond types, noting improved financial stability from spending reductions and revenue enhancements. However, Moody's changed the outlook on some of Tucson's bonds to negative due to loss of revenue from the state's budget actions. The chief financial officer said maintaining the ratings and moving some outlooks to stable reflected the city's progress in responding to economic challenges through difficult budget changes.

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    The three main bond rating agencies affirmed the City of Tucson's bond ratings after the city cut spending and increased revenues to narrow its budget gap. While the rating levels were maintained, Fitch revised the outlook to stable from negative for several of Tucson's bond types, noting improved financial stability from spending reductions and revenue enhancements. However, Moody's changed the outlook on some of Tucson's bonds to negative due to loss of revenue from the state's budget actions. The chief financial officer said maintaining the ratings and moving some outlooks to stable reflected the city's progress in responding to economic challenges through difficult budget changes.

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    64 views1 page

    Bond Rating 060111

    Uploaded by

    Richard G. Fimbres
    The three main bond rating agencies affirmed the City of Tucson's bond ratings after the city cut spending and increased revenues to narrow its budget gap. While the rating levels were maintained, Fitch revised the outlook to stable from negative for several of Tucson's bond types, noting improved financial stability from spending reductions and revenue enhancements. However, Moody's changed the outlook on some of Tucson's bonds to negative due to loss of revenue from the state's budget actions. The chief financial officer said maintaining the ratings and moving some outlooks to stable reflected the city's progress in responding to economic challenges through difficult budget changes.

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    CITY OF TUCSON

    NE W S RE L E A S E
    FOR IMMEDIATE RELEASE

    Contact: Michael Graham Date: June 2, 2011


    Public Information Officer TDD: 791-2639
    837-6686

    CITY OF TUCSON’S POSITIVE BOND RATINGS AFFIRMED

    Three separate bond rating agencies have recognized the City of Tucson’s efforts to cut spending and enhance
    revenue by maintaining the City’s rating levels for the sale of bonds. Standard & Poor’s, Moody’s Investors
    Service and Fitch Ratings this week issued their ratings for the City’s General Obligation Bonds, Certificates of
    Participation, Water Bonds and Highway User Revenue Fund (HURF) Bonds.

    “Over the last few years the City of Tucson has had to make some very difficult budget decisions and the fact
    that the City was able to maintain its rating position is quite an accomplishment,” said Kelly Gottschalk, Chief
    Financial Officer for the City of Tucson.

    While no changes were made to the rating levels, five of the future outlooks were adjusted. Fitch revised the
    outlook to stable from last year’s negative outlook for the City’s General Obligation Bonds, Certificates of
    Participation and Water Bonds. An "outlook" assigned from a rating agency indicates the opinion of the rating
    agency of the likely direction of the issuer's credit rating over the medium term. In its report, Fitch stated that
    improving the City’s outlook to stable results from “a stabilization in the city’s financial profile as spending
    reductions and revenue enhancements have significantly narrowed a structural budget gap and contributed to a
    better than expected operating results in fiscal 2010.”

    Moody’s did change the City’s outlook on HURF senior and junior bonds from stable to negative, which
    reflects the sizable revenue loss from the state’s budget actions.

    “The fact that we were able to move from a negative to a stable outlook for the City's general and water credits
    is a significant move, especially in this tough economic environment,” Gottschalk said. “Although not out of the
    woods yet, the difficult changes that have been implemented to respond to this new economic reality are making
    a difference and improving the overall stability of the City's financial position.”

    ###

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