Standard & Poor's Ratings Services said it raised its long-term rating and underlying rating on Cambridge, Minn.'s general obligation bonds to AA from AA-minus.
At the same time, Standard & Poor's assigned its AA long-term rating to the city's series 2014A GO bonds. The outlook is stable.
"The higher rating reflects the city's consistently very strong financial position," said Standard & Poor's credit analyst Blake Yocom.
In addition, Standard & Poor's raised its long-term rating on the Cambridge Economic Development Authority's (EDA) lease-revenue debt, supported by the city, to AA-minus from A-plus, reflecting appropriation risk.
The city's unlimited-tax GO pledge secures the series 2014A bonds. The city anticipates that the debt service will be paid from special assessments and net revenues of the city-owned sewer, water, and stormwater sewer systems. Bond proceeds will be used to finance street improvement projects, current refund the city's series 2007A GO improvement bonds, and advance crossover refund its series 2005A GO water and sewer revenue bonds for expected interested cost savings.
"The rating and stable outlook reflect our assessment of Cambridge's very strong budgetary flexibility and liquidity," said Standard & Poor's credit analyst Blake Yocom, "along with very strong management conditions."
Other factors include its: strong budgetary performance; adequate economy with access to the Minneapolis-St. Paul-Bloomington, Minn.-Wis. metropolitan area; and weak debt and contingent liabilities position improved by rapid debt amortization.
"We do not anticipate changing the rating during the two-year outlook horizon," said Yocom, "given that we view any strengthening in the economy and debt and liability factor scores as unlikely."
