Standard & Poor's Ratings Services said it raised its long-term rating and underlying rating on East Hampton, Conn.'s general obligation bonds to AAA from AA-plus.
At the same time, Standard & Poor's assigned its AAA rating to the town's 2015 GO bonds and assigned its SP-1-plus short-term rating on its GO bond anticipation notes. The outlook is stable.
"The upgrade reflects the town's record of general fund surpluses that we believe demonstrates financial stability and supports our view of strong management," said Standard & Poor's credit analyst Hilary Sutton.
The GO bonds and BANs are secured by the town's full faith and credit pledge.
East Hampton is rated above the sovereign because the agency believes the town can maintain better credit characteristics than the U.S. in a stress scenario based on its predominantly locally derived revenue base and its view that pledged revenue supporting debt service on the bonds is at limited risk of negative sovereign intervention. Intergovernmental revenue--the majority of which is state aid for education--accounted for 29% of the town's revenue base in fiscal 2014.
