Standard & Poor’s last week raised the town of Normal’s general obligation rating to AA-plus from AA in recognition of its positive financial operations and the sustained strength of its reserve levels ahead of the town’s $10 million debt sale.
The bonds are expected to sell the week of Aug. 4. Proceeds will finance capital improvements in Normal’s uptown area. Officials anticipate issuing an additional $6 million of GOs in 2009 to complete the uptown plan.
The rating also reflects Normal’s stable economic base, which is anchored by Illinois State University, a growing property and sales tax base, and conservative management practices. Analyts said factors that offset the town’s strengths include a moderately high debt burden stemming from a substantial redevelopment project, and slow debt amortization.
Normal’s capital program is focused on its uptown renewal project. The plan consists of a hotel and conference center, multi-modal transportation center, and substantial roadway and infrastructure improvements to accommodate the new facilities, according to Fitch Ratings.
“We expect that the town will maintain its sound finances and strong reserves with the help of its good management practices and growing sales tax base and that the town’s debt burden will ease back into the moderate range with additional population and tax base growth,” Standard & Poor’s analyst Helen Samuelson wrote.
Normal is located in central Illinois. Along with the city of Bloomington, the two serve as a hub for retail, service, and transportation for a nine-county area. The town’s population grew by 11% to more than 50,000 since 2000.
Ahead of the bond sale, Fitch affirmed Normal’s AA-plus rating on the new issue and on its $64 million of outstanding GOs.
