Moody's Investors Service said it has assigned a Aa1 rating to the city of Kettering, Ohio's $17.7 million general obligation limited tax capital facilities improvement and refunding bonds, Series 2015.
Concurrently, Moody's has upgraded the rating on the city's outstanding GO debt to Aa1 from Aa2, affecting $27.6 million of post-sale general obligation debt.
The Series 2015 bonds are secured by the city's general obligation limited tax (GOLT) pledge, subject to the state of Ohio's (Aa1 stable) statutory 10-mill limitation. Approximately $15.5 million of bond proceeds will finance the construction of several fire stations as part of the city's fire station improvement plan, and $2.2 million of bond proceeds will advance refund the city's Series 2005 GOLT bonds for estimated net present value savings of 7.2% of par. Post-sale the city will have $9.7 million of general obligation unlimited tax (GOULT) and $15.7 million of GOLT debt outstanding.
The upgrade to Aa1 reflects the city's strong financial management practices, sizable general fund reserves, as well as over $40 million of additional liquidity available in the city's capital projects fund. The rating additionally reflects the city's moderately sized tax base located near the city of Dayton (Aa2 stable), moderate debt position, and above average exposure to unfunded pension liabilities based on participation in two statewide cost sharing plans.
