Standard & Poor's Ratings Services said it raised its rating on Richmond, Va.'s general obligation debt one notch to AA-plus from AA.
The outlook is stable.
The upgrade reflects Standard & Poor's assessment of the city's strong financial performance maintenance, including strong reserves, supported by formally adopted fiscal and debt policies, and its continued strong investment in city economic development projects.
At the same time, the rating service assigned its AA-plus rating and stable outlook to the city's $130 million series 2013A and $11.33 million series 2013B GO public improvement bonds. The stable outlook reflects Standard & Poor's view of Richmond's role in the regional economy and continued economic development.
"We recognize ongoing economic development will likely translate into property tax base and employment growth over the next few years. We believe the city's commitment to financial maintenance and its further strengthening of its solid finances are credit strengths," said Standard & Poor's credit analyst Timothy Barrett. "As such, we do not expect to change the rating within the outlook's two-year period."
The rating also reflects the rating service's opinion of the city's: stable and large economy that continues to diversify and anchors the local and regional metropolitan area employment bases; adequate income with roughly 25% of the population reporting income below the federal poverty line -- Management, however, partially attributes this to the large student population; strong finances with strong reserves, supported by adopted financial and debt policies; very experienced management team that remains committed to upholding conservative fiscal policies; and moderate per capita debt with above-average amortization and a manageable capital plan.
Standard & Poor's believes what it considers the city's adequately funded pension plan, with a goal of rebuilding levels within a specific period, and the city's ongoing efforts to address poverty somewhat mitigate these credit strengths.
The city's full-faith-and-credit-GO pledge secures the bonds. Officials plan to use series 2013A and 2013B bond proceeds to current refund the city's series 2012 GO line of credit bond anticipation note and reimburse the city for school project and general capital improvement project costs.
