Standard & Poor's Ratings Services said it raised its long-term rating on Shelton, Conn.'s general obligation debt to AA-plus from AA.
The outlook is stable.
"The upgrade reflects the city's consistently strong budgetary performance, which has led to strong budgetary flexibility," said Standard & Poor's credit analyst Timothy Daley.
At the same time, Standard & Poor's assigned its AA-plus long-term rating to the city's series 2014 GO refunding bonds. The outlook is stable.
A pledge of the city's full faith and credit and an agreement to levy ad valorem property taxes without limitation as to rate or amount secure these bonds. Proceeds will refund certain maturities of the city's series 2009B GO bonds.
"The rating reflects our assessment of the city's strong budgetary flexibility and performance, along with very strong liquidity," said Daley.
Other factors include its: very strong economy, which benefits from participation in the broad and diverse Bridgeport-Stamford-Norwalk metropolitan statistical area (MSA); strong management with standard financial policies and a consistent ability to maintain balanced budgets; and very strong debt and contingent liability profile, aided by rapid amortization.
"The stable outlook reflects our opinion of Shelton's participation in the Bridgeport-Stamford-Norwalk MSA, which provides stability to the local economy," said Daley. The agency believes the city will continue to effectively manage its budgetary performance and maintain at least adequate budgetary flexibility.
Over time, continued maintenance of strong budgetary performance, coupled with improved budgetary flexibility, and a more formalized financial management policy framework, could result in an upgrade. While currently unlikely, a substantial decline in available reserves due to ongoing weak budgetary performance could result in a downgrade.
