Buffalo, N.Y. received an improved credit outlook from two rating agencies ahead of a planned bond sale.
Moody's Investors Service and S&P Global Ratings both revised Buffalo's outlook to positive from stable Tuesday citing an improved local economy. Buffalo is planning a $25.5 million general improvement serial bond sale on April 19 that will include infrastructure enhancements throughout the city and a rehabilitation of the city court building.
"The outlook change is based on the city's improved economic fundamentals with market values up over 20% in the past five fiscal years, supporting a market value per capita of more than $30,000," S&P credit analyst Rahul Jain said in a statement.
S&P rated the new bond deal A-plus while also affirming the city's A-plus general obligation rating. The bonds were rated A1 by Moody's and AA-minus by Fitch Ratings.
"The positive outlook reflects our expectation that the city's liquidity and reserve position will remain strong, as evidenced by elimination of the need for seasonal cash flow borrowing," said Moody's analyst Tiphany Lee-Allen in an April 4 report. "The outlook further factors our expectation of continued modest growth in the local economy and an expected maintenance of the city's currently strong financial position, despite modest use of reserves over the near term."
Buffalo, which ran into severe financial trouble in 2003 resulting in creation of a state control board, has received three one-notch upgrades in the last five years including a boost by Fitch to AA-minus in November. New York State's second largest city was upgraded to A-plus by S&P in 2014 and A1 by Moody's in 2012. The city has $220 million in outstanding GO debt, according to Moody's.