DALLAS - Amarillo had its underlying credit raised to AAA from AA-plus by Standard & Poor's as the West Texas town prepares to issue $17.4 million of certificates of obligation.
Analysts said the gilt-edged rating reflects the city's "strong and stable economic base, coupled with good management policies and historically strong financial performance."
The city's location in the Texas panhandle has led to it becoming a regional retail, medical, and service-center base for the area and the economy has "developed a substantial regional service component over time," according to analysts. The upgrade applies to $89.6 million of debt outstanding.
The city joins the North Texas suburbs of Addison, Coppell, Irving, Plano, and Richardson carrying triple-A ratings on GO debt. Austin, the capital, and tiny Bunker Hill Village are the only other Texas municipalities with the highest ratings. Addison, Coppell, Richardson, and Bunker Hill Village, which is outside Houston, were elevated to the triple-A category last year.
Moody's Investors Service assigned its Aa2 underlying rating to Amarillo's upcoming CO sale.
City officials weren't immediately available to comment on when the debt will come to market.
Analysts said the city's location in the northwest corner of Texas has helped it become a regional retail center for five states. Colorado, Kansas, Oklahoma, and New Mexico are all less than 150 miles from Amarillo, which has four Wal-Mart stores and one Sam's Club among other big-box retailers to draw consumers.
The city's tax base averaged 6.7% growth the past five years to $9.7 billion for fiscal 2009, which is 37% higher than five years earlier. At least $197 million of new property was added to the tax rolls last year and projections show another increase of 2.6% for 2010, according to analysts.
Moody's also said the economy is being further strengthened by an emerging dairy industry while "cattle and oil continue to be major economic drivers."
Amarillo's current population of more than 190,000 is up about 10% from the 173,627 reported at the 2000 Census.
Fitch Ratings doesn't rate the city's underlying credit.
