Standard & Poor’s raised its underlying rating on North Providence, R.I.’s general obligation debt two levels to A from BBB-plus, citing its new local GO criteria.
S&P on Wednesday also assigned its A long-term rating to Rhode Island Health and Educational Building Corp.’s Series 2013 public school revenue bonds, issued for North Providence. Pursuant to the financing agreement, North Providence has pledged its full faith and GO pledge to the repayment of the bonds.
The town will use proceeds to refund its Series 2003 bonds for interest-rate savings.
This marks the second S&P upgrade this year for 32,000-population North Providence. In March, the rating company raised its rating two notches from BBB-minus after the city received its share of a settlement from Google Inc. and earmarked it to offset its police pension liability.
North Providence and East Providence received $60 million apiece in April 2012 after assisting a federal investigation into online ads that Google distributed for Canadian pharmacies that were illegally marketing prescription drugs to Americans.
Both cities assisted in the U.S. Department of Justice investigation.
Moody’s Investors Service elevated the city to Baa1 from Baa2 and reaffirmed it this week, affecting roughly $30 million of debt.
“In our view, the A unenhanced rating reflects North Providence’s strong financial performance and improved liquidity,” S&P credit analyst Victor Medeiros said Wednesday. The town also maintains strong debt and liabilities profile that reflects improved pension funding levels after a windfall settlement, according to Medeiros.
The stable outlook reflects North Providence’s focus on rebuilding its operating flexibility and enhancing financial management controls.
