Bond rating important indicator of financial health
By Kevin Flowers, Erie Times-News, Pa. | |
McClatchy-Tribune Information Services |
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With many other cities nationwide also struggling with massive pension debt, depleted cash reserves and other liabilities, the municipal bond market "has gotten cautious. ... Mostly what we see right now is cities being lowered in their bond ratings," said
Coulter sees
"The better your rating, the better your interest rate on the money you borrow," Coulter said. "You can't do any significant infrastructure development without the ability to issue bonds. If you're going to do a water project, fix roads, put new pipes in the ground, you really need this ability."
Standard & Poor's highest rating is AAA, which indicates an "extremely strong" ability to meet financial obligations, according to the company.
A strong bond rating also helps a municipality save money on bond insurance, which guarantees payment of principal and interest on a municipal bond if the issuer defaults on payments.
"As our bond rating has gone up, our fees and costs have gone down," said
Lichtenwalter said insurance for
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