DALLAS - Standard & Poor's has elevated Denver to triple-A status based on the Mile High City's sound fiscal policies, steady growth, and healthy fund balances.
The upgrade from AA-plus gives the city top marks from one of the three rating agencies. Moody's Investors Service rates Denver's general obligation debt at Aa1, while Fitch Ratings last pegged Denver at AA-plus.
But the city has not received new rating reports from Fitch or Moody's in advance of its upcoming $16.5 million certificates of participation issue.
The top credit rating from Standard & Poor's will help lower future interest cost on $576 million of authorized but unissued GOs, including $550 million approved by voters last November for a variety of civic improvements over the next five to seven years.
"We're thrilled," said Margaret Danuser, debt administrator in the Denver Department of Revenue. "The city has made some hard choices in how we run our fiscal policies, and we're glad to see it's paying off."
The city plans to refund $256 million of variable-rate lease debt on Sept. 24 to get rid of insurance from Ambac Assurance Corp. JPMorgan will serve as senior manager and share remarketing duties with Wachovia Securities.
Meanwhile, Denver is preparing to issue the $16.6 million of certificates of participation in October for a 316-vehicle parking facility serving the Denver Botanic Gardens and nearby city parks. The COPs will carry a rating of AA-plus from Standard & Poor's.
The $14.2 million parking garage is part of a larger $79.6 million development plan for the Botanic Gardens, a major visitor attraction in the Capitol Hill neighborhood near downtown.
Denver's AAA rating from Standard & Poor's comes on the heels of the first Democratic National Convention held in the city in 100 years. The convention that drew 84,000 people to hear Sen. Barack Obama's acceptance speech boosted sales tax collections by an estimated $2 million.
Denver held a AAA from Standard & Poor's until it was downgraded to AA in 1987, an analyst said.
Western cities that share the AAA status include Seattle, San Jose, and Phoenix, which joined the list last year. There are 83 cities of all sizes with Standard & Poor's AAA rating, ranging from Phoenix at 1.6 million people to Banockburn, Ill., at 1,609.
Although Denver is the hub of a sprawling metro area with 2.7 million people, the city itself is landlocked by suburbs and growing slowly with a population of 587,528 in 2007.
Much of the city's growth is related to the redevelopment of the former Stapleton Airport by developer Forest City. About 31% of greater metropolitan area employment is located within the city, which levies a small employment tax on people who work in the city but live elsewhere.
Employment increased 4.5% between 2004 and 2007, while the greater Denver metropolitan area employment increased a larger 7.1% from 2003-2007. The city suffered a sharp 8.2% drop in employment from 2000-2004 amid the tech and telecom slowdown.
The latest S&P Case-Shiller home price indexes showed Denver home prices enjoying the strongest rebound of the 20 markets studied. The report released yesterday showed home prices rose in June from a month earlier in nine cities. Denver had the biggest gain at 1.5%, followed by Boston at 1.2%. The 20-city composite index fell by 0.5% from May.
