Standard & Poor's Ratings Services said it raised its long-term rating on Park Rapids, Minn.'s existing general obligation bonds to AA-minus from A-plus.
At the same time, Standard & Poor's assigned its AA-minus long-term rating to its series 2015A GO improvement and refunding bonds. The outlook is stable.
"The raised rating is based on our view of the city's very strong budgetary flexibility, as reflected in the city's high available fund balance," said Standard & Poor's credit analyst David Smith.
Officials will use bond proceeds for capital improvement projects and to crossover refund the series 2008A bonds for interest cost savings.
The stable outlook reflects the anticipation that management will maintain its very strong reserves and retain its high fund balance. The rating agency does not anticipate changing the rating during the next two years. However, should the city draw down its fund balance substantially, or if either its budgetary performance or debt and contingent liability were to worsen, a lower rating is possible. A higher rating within the next two years is not expected given the city's weak economic characteristics and weak debt profile.
Park Rapids, with an estimated population of 3,707, is located in Hubbard County. The city serves as a summer destination for tourists, with the population swelling to about 10,000 during the summer months.
