Standard & Poor's Ratings Services said Friday it raised its long-term rating on Pittsburgh's general obligation debt by three notches to A from BBB.
The outlook is stable.
"The upgrade reflects our assessment of the city's restoration of structurally balanced operations, growth in reserves, reduced debt profile, and actions to address its large long-term liabilities," said Standard & Poor's credit analyst Andrew Teras. "While these trends have progressed over the last several years, we believe that, at this time, the city has demonstrated a proven ability to maintain an enhanced credit profile featuring improved financial management and planning, consistently favorable budget performance, and strong reserves and liquidity."
Other factors supporting the rating include: the continued oversight by the Intergovernmental Cooperation Agency (ICA) and Act 47 coordinator, as well as the enhanced monitoring and reporting of such oversight; and the city's deep and diverse economic base that fared relatively well through the economic downturn and has favorable long-term prospects.
Limiting the rating is the agency's belief that Pittsburgh will be challenged to further improve its credit profile in the near to medium term as, despite significant progress, the city still faces pressures stemming from high fixed costs, sizable long-term liabilities, and diminished budgetary flexibility due to allocation of a portion of reserves and operating resources to address its high debt burden and underfunded pension system.
