Two series of pension obligation bonds totaling $47.4 million that Pasadena planned to price this week received AA-plus ratings from Fitch Ratings.
The bond proceeds will fund the city’s Fire and Police Protection System, raising the actuarially determined funded ratio to around 85%, according to the Fitch report published March 8.
Fitch gave the city an implied AAA general obligation bond rating. Pasadena also has AA-plus ratings on $103.9 million of pension obligation bonds issued in 1999, $266.8 million of outstanding certificates of participations in three different series, and $27.5 million of taxable lease revenue refunding bonds backed by parking facilities.
Fitch also affirmed AA-plus ratings on four series of lease revenue bonds totaling $156.2 million issued in 2010 by the Pasadena Public Financing Authority.
The current issuance is designed to address a significant unfunded actuarial liability in the city’s closed Fire and Police Protection System.
The city’s overall debt burden is above average but mitigated to some extent by dedicated revenue sources that reduce the general fund’s debt service exposure, analysts said.
They cited the city’s unrestricted general fund balance that stood at a $46.5 million, or 20.3% of spending at the end of fiscal 2011, as part of the reason for the high marks.