Moody's Investors Service said it has upgraded the city of San Diego's issuer rating to Aa2 from Aa3 and upgraded the city's outstanding lease revenue bonds to A1 from A2.
The outlook on the ratings is stable.
The rating upgrade reflects the city's improved financial position, marked by growing cash and reserves over the past five fiscal years; a growing local economy with sound long-term prospects; new, stronger financial policies; and the city's continued commitment to addressing its pension and OPEB liabilities.
The rating also incorporates the city's strong fiscal management that maintained a stable, albeit limited reserve position through the economic downturn with aggressive expenditure controls.
The city's robust financial management has strengthened financial policies and increased reserve targets since the economic turnaround and is on pace to achieve these goals as a result of healthy growth in top revenue sources.
Additionally factored in the rating is the large and diverse economy which has shown positive trends in key economic indicators including declining unemployment and improved socio-economic income and wealth measures. The city's debt burden is low and composed solely of fixed rate debt.
