Wall Street affirms Covington’s financial stability
COVINGTON, Ky. – The City has received an A1 credit rating from Moody’s Investors Service for the third year in a row.
The A1 rating is one of the highest ratings a debt issuer can receive, classifying Covington’s general obligation bonds as investment grade and subject to low credit risk. The rating strengthens the City’s ability to attract investors and new businesses to the City and would save taxpayers money in the event the City ever had to take on additional long-term debt.
“There are so many positive takeaways in this report,” Covington Finance Director Steve Webb said. “The growing tax base, the strong and improved financial position supported by formalized fiscal policies, and manageable long-term liabilities are all highlighted.”
Webb said the City also received a G-1 score for governance, the highest score possible in that category.
“This score reflects strong institutional structure, budget management, and demonstrated policy effectiveness,” Webb said.
The report stated that the city’s financial position is healthy and supported by conservative budgeting practices and strong fiscal policies, enhanced expenditure controls, and tax base growth.
Moody’s upgraded the City’s credit rating to A2 in 2019 and to A1 in 2020 and gave the City a “positive outlook.”
During its most recent credit analysis, Moody’s removed that “positive outlook,” saying that removal “reflects favorable trends in the City’s tax base and financial operations that remain appropriate for the current rating category, and will likely remain stable over the outlook period.”
In that way, Webb explained, the removal was actually a good thing.
“It actually indicates stability in the strong financial position the City has built over the past several years,” said Webb. “In essence, the reassurance was no longer needed given that stability.”
See Moody’s press release to read more.
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