Wall Street credit rating agency Moody’s Investors Service has affirmed Coral Springs’ Aaa general obligation rating and a Aa1 non-ad-valorem and special tax ratings on the City’s $53 million of currently outstanding debt. Moody’s changed the rating outlook from stable to negative due to the level of overall tax revenues which have not fully recovered to pre-recession levels. Moody’s also mentioned the long time horizon required to rebuild the City’s taxable assessed values which forms the foundation of its future tax revenues. These revenues are of interest to the rating agency because they are pledged toward the repayment of loans.
According to Moody’s, “The Aaa general obligation rating is based on the city’s sizable but declining tax base, sound financial management practices, and manageable debt position.”
Moody’s praised Coral Springs for its strong management with long term planning, strong financial position, and manageable debt burden.
Much like an individual’s credit rating, a bond rating is a measure of an organization’s credit worthiness. Organizations rated Aaa demonstrate the strongest creditworthiness relative to other US municipal or tax-exempt issuers or issues. Aaa bond ratings are often referred to as the ‘Prime’ rating because it symbolizes the highest quality investment with the smallest degree of risk. As a Aaa rated city, the City of Coral Springs has saved, and will continue to save, millions of dollars in interest and credit enhancements such as bond insurance.
“It is encouraging to see that Wall Street appreciates the City Commission’s commitment to long-range planning and their willingness to make difficult decisions that are in the best interest of our residents,” City Manager Erdal Donmez said. “This achievement was a collective effort,” Donmez added, “that would not have been possible without the diligent effort of all our employees pitching in and working together during these very difficult economic times.”