S&P Raises Marshall GOs

Standard & Poor’s last week raised the underlying rating one notch to A-plus on the city of Marshall’s general obligation debt in recognition of its continued maintenance of healthy fund balances and very strong reserves.

The review was done in conjunction with the city’s issuance of $1.35 million of limited-tax GO bonds. The rating reflects Marshall’s proximity to the Lansing, Kalamazoo, and Battle Creek economic bases; a slowly recovering tax base after significant losses in 2006; and adequate income, strong wealth levels, and moderate debt levels. The city is home to nearly 7,500 residents and has $10.9 million of debt affected by the upgrade.

“We expect that the city will continue to maintain at least strong reserve levels as the tax base continues to recoup from significant losses in 2006,” wrote analyst John Sauter. “The currently very strong reserve levels and property tax levy flexibility provide security against any future revenue fluctuations that may occur. A conservative management team and the city’s proximity to several large economic bases provide further stability to the rating.”

Though the city is pledging its full faith and credit to the bonds, officials intend to repay the new debt from water utility system revenues. Proceeds are to finance capital improvements to the system.

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