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Carrollton Receives 'AAA' Ratings for GO Bonds

Post Date:04/28/2016
Fitch Ratings Inc. has assigned a “AAA” rating to the City of Carrollton for $27.9 million in general obligation (GO) improvement and refunding bonds, series 2016. The rating outlook is Stable.

According the rating report, key factors in receiving the “AAA” score include Carrollton’s strong expenditure flexibility provided by the City’s sound reserve cushion; a diverse economic and employment resource base; a strong socio-economic profile including low unemployment and above average educational attainment; projected solid growth to the City’s revenue and expenditure frameworks; as well as low long-term liability burdens.

“The city's demonstrated willingness and ability to cut spending and limited use of its ample revenue-raising flexibility have preserved a strong and stable reserve cushion, leaving the city well positioned to address cyclical downturns,” the report states.

The report affirmed the City’s adopted $91.3 million fiscal 2016 general fund operating budget was structurally balanced, and that revenues and expenditures are favorably performing in comparison to fiscal 2015 with particularly strong (15.5%) sales tax gains that stem from Carrollton’s warehouses and business parks.

This sales tax revenue generated in excess of the year's budgeted cap will be used for nonrecurring, capital purposes in line with City policy, which Fitch views as a prudent and proactive budgeting strategy.

Additionally, Standard & Poor’s Ratings Services assigned Carrollton’s GO bonds with its “AAA” long-term rating. At the same time, Standard & Poor's affirmed its “AAA” long-term rating and underlying rating (SPUR) on the City's existing GO debt.

The ratings reflect factors such as the City’s strong economy, financial management, budgetary performance and flexibility, strong liquidity and institutional framework as well as weak debt and liability position.

The series 2016 GOs are expected to price via competitive sale by Tuesday, May 3. The bonds will be used to fund various citywide capital projects and to refund certain outstanding maturities for annual debt service savings.

“Sound financial management is not exciting, but is the backbone of a well-run city,” Mayor Matthew Marchant said.

Earlier this year, the City received “AAA” ratings from Fitch for more than $14 million in waterworks and sewer system revenue bonds, series 2005, 2007, and 2012.

Fitch Ratings is a global leader in financial information services with operations in more than 30 countries. The company provides credit ratings, expert commentary, and market research. Standard & Poor’s Ratings Services provides high-quality market intelligence in the form of credit ratings, research, and thought leadership.

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