S&P Global Ratings revised its outlook on the District of Columbia's (DC) general obligation (GO) bonds to positive from stable and affirmed its 'AA' rating on the bonds. At the same time, S&P Global Ratings assigned its 'AA' rating and positive outlook to the district's series 2017A GO refunding bonds.
"The revised outlook reflects our view of the District's sustained financial strength, with improved available reserves resulting from six consecutive years of general fund operating surpluses," said S&P Global Ratings credit analyst Timothy Barrett. "In addition, this financial improvement is a good step toward mitigating our concerns regarding the uncertainty the District faces with regard to potential changes in levels of federal employment or a
possible federal government shutdown, Mr. Barrett added.
The District's financial strength is further evidenced by its improved liquidity, such that the DC is no longer reliant on tax revenue anticipation notes for liquidity purposes. The outlook revision also takes into account the District's very strong wealth and income indicators, which continue to show a strong upward trajectory and underpin DC's strong revenue growth.
S&P bases the GO rating on the District's full faith and credit pledge.