Standard & Poor's raised its long-term rating on Amherst, Mass.' general obligation bonds to AA-plus from AA, citing the town's strong budgetary performance and strong budgetary flexibility, further bolstered by its strong management conditions.
The outlook is stable.
At the same time, S&P assigned its AA-plus rating and stable outlook to the town's Series 2014 GO bonds. The town expects to use proceeds to finance sewer system improvements and other capital projects and capital equipment purchases.
Amherst, 25 miles east of Springfield, is home to the main campus of the University of Massachusetts, which S&P called a positive. The rating company also called the town's budgetary flexibility "very strong," with 2013 audited available reserves at 13.4% of general fund expenditures and a demonstrated willingness to raise property taxes.
S&P also pointed to a healthy debt and contingent liability position characterized by low debt service as a percent of total governmental funds expenditures.
"The stable outlook reflects our expectation that Amherst's continued good fiscal management will allow the town to maintain strong general fund reserves commensurate with its formal policy throughout the economic cycle," said S&P credit analyst Timothy Daley.
