BRADENTON, Fla. - Moody's Investors Service changed the outlook to positive from stable on Atlanta's Aa2 general obligation bond rating, citing stabilized reserve levels and a return to economic growth.
The outlook change applies to $276.7 million in outstanding GO debt, and comes ahead of a planned $56 million GO refunding, the city's city chief financial officer, Jim Beard, said Oct 14.
The refunding will be issued as $15.84 million in tax-exempt GO refunding bonds and $40.06 million in taxable GOs.
"The positive outlook reflects our expectation that the city's reserves will stabilize at currently sound levels following a period of tax base declines and rapid financial improvement," analyst Lauren Von Bargen said in an Oct. 10 rating report.
"The outlook also incorporates our expectation of healthy levels of future growth in the city's tax base, which saw significant declines and high foreclosure rates throughout the recession, but is showing signs of rebounding," she said.
The Aa2 rating reflects the city's improved reserve and cash position, the diversity and scope of the city's mature economic base that remains at the center of a nationally important trade and transportation hub, and incorporates the city's manageable debt and pension burdens, Moody's said.
Though Atlanta was hit hard by the recession, the city currently has $138 million in reserves that are projected to reach $142 million by the end of the year.
In June, Standard & Poor's upgraded Atlanta's GO bond ratings to AA from A, with a stable outlook.
"I am happy to see another ratings agency confirm that the city of Atlanta is in good financial health," Beard said. "The Department of Finance will work diligently to ensure that creditors continue to see Atlanta and its bonds as safe and secure investments."
Beard said the city plans to price the refunding bonds on Oct. 28, with closing on Nov. 6.
The city anticipates receiving present value savings of $384,494 or 2.37% on the tax exempt portion of the deal, and $2.07 million or 5.48% on the taxable portion.
Atlanta plans to ask voters early next year for approval to issue $250 million in new GO bonds to assist in addressing a backlog of infrastructure projects.