BRADENTON, Fla. - Moody's Investors Service upgraded Miami's general obligation bond ratings to A1 from A2, and its non-ad valorem revenue bonds to A2 from A3.
The higher ratings affect $13.6 million in outstanding GOs and $426.4 million of revenue bonds. The outlook was revised to stable from negative, Moody's said March 5.
"The upgrade is based on a resurgent economy with multiple major projects underway, a strengthened financial position, a new management team that has implemented prudent fiscal policies, and a manageable debt profile," said analyst Edward Damutz.
While the higher GO rating incorporates Miami's status as a major trade, transportation hub and tourist destination, Damutz said, "the city's credit is weighed down by weak socioeconomic indices, growing pension pressures, and protracted legal disputes."
The stable outlook reflects the re-establishment of a healthy reserve position as well as the city's economic recovery.
Ongoing investigations by the Securities and Exchange Commission remain a potential risk to the city's credit quality, Moody's said.
The SEC filed suit against the Miami and former budget director Michael Boudreaux in July 2013, and is seeking financial penalties. The suit charged both with securities fraud for making faulty disclosures in connection with three bond offerings in 2009, by making "materially false and misleading statements and omissions" about a growing general fund deficit.
The suit has been delayed while Boudreaux appealed rulings denying his bid to be considered immune from prosecution by virtue of being a former city official. Boudreaux has said he plans to appeal the most recent denial by the 11th Circuit Court of Appeals to the Supreme Court, and has until March 17 to file a petition.
The SEC also is continuing to investigate bonds that were issued by Miami and Miami-Dade County to build a Major League Baseball stadium and parking garages for the Miami Marlins.
Moody's GO upgrade brings it in line with recent rating lifts by other agencies.
Standard & Poor's upgraded the GO ratings four notches to A-plus from BBB on Feb. 9. Fitch Ratings raised Miami's GOs to A-plus from A-minus in November.
