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City of Carrollton Receives ‘AAA’ Long-Term Ratings on Bonds

Post Date:05/11/2021 8:35 AM

S&P Global Ratings (S&P) and Fitch Ratings, Inc. independently assigned a “AAA” long-term rating to the City of Carrollton for $26.5 million in general obligation (GO) improvement and refunding bonds, series 2021. The ratings outlook is Stable. 

S&P and Fitch also independently affirmed Carrollton’s “AAA” long-term rating for the City’s previously issued $178 million in outstanding GO debt, series 2011 through series 2020. 

“The reviews from S&P and Fitch were very thorough given the current situation with COVID-19 and the resulting impact on the economy,” Assistant City Manager for Finance Bob Scott said. “I am pleased to once again report the confirmation of a AAA-Stable rating from both agencies. This is literally as good as it gets ratings wise.”

Carrollton’s GO debt is rated above the sovereign, because S&P believes the City can maintain better credit characteristics than the nation in a stress scenario. The stable outlook reflects S&P’s view that Carrollton’s economic base will remain resilient despite the external pressures imposed by COVID-19 and an ensuing recessionary period. It reflects the expectation that management will take the necessary steps to maintain the City’s very strong budgetary flexibility despite possible short-term revenue loss.

The “AAA” S&P score is based on a very strong economy with access to a broad and diverse metropolitan statistical area (MSA); very strong management with strong financial policies and practices; strong budgetary performance with operating surpluses in the general fund and at the total governmental fund level in fiscal 2020; very strong budgetary flexibility, liquidity, and access to external liquidity; as well as a strong S&P institutional framework score. 

“Carrollton’s strong financial position is a reflection of the City’s stable leadership and is the result of the vision and support of the City Council over a long period of time,” Scott said. “We are very pleased that S&P Global and Fitch Ratings, Inc. recognize the importance of strong financial practices that have been verified as effective through consistently strong financial results even in times of economic downturn.”

Fitch affirms the ratings reflect the City’s highest level of demonstrated and anticipated operating financial resilience through future economic cycles; ample expenditure flexibility; solid revenue growth prospects with low, long-term limited liability burden; and high revenue-raising ability. Further population growth and a resurgence of economic expansion post pandemic appear likely over the longer term, given the City’s fundamental economic strengths.

“Strong financial management, robust forecasting, and frequent budget monitoring practices are the underpinning of an efficient, successfully-run City like Carrollton,” Mayor Kevin Falconer said. “The City Council regularly reviews rolling capital improvement plans, budgetary status reports, and quarterly investment reports supplied by City management. These practices along with strong financial leadership and fiscally responsible budgeting allows us to weather storms such as the one we are in today and ensure the City of Carrollton is primed for future growth.”

The City’s GO bonds are issued on a pledge of the continued direct annual ad valorem tax levied, within the limits prescribed by law, on all taxable property within the City. According to S&P, the City’s levy is well below the maximum and is on par with S&P’s view of Carrollton’s general creditworthiness.

The City of Carrollton will use the proceeds from the series 2021 GO bonds to fund voter-approved capital projects for various citywide street, traffic, park, and public safety improvements; refund certain outstanding debt maturities for debt service savings; and pay issuance costs.

S&P’s report states Carrollton has historically maintained strong budgetary performance tied to strong revenue growth and conservative budgeting and recognizes that the City could experience short-term revenue loss tied to the COVID-19 global pandemic, but that its existing policies and budget monitoring well-position the City to withstand the temporary disruption and limit its exposure to economically sensitive revenues within the operating budget. 

The Fitch report acknowledges the City’s demonstrated willingness and ability to adjust spending when necessary has preserved a strong and stable reserve cushion, contributing to the highest financial resilience assessment. General fund volatility has historically been modest.

S&P Global Ratings is an American credit rating agency and a division of S&P Global that publishes financial research and analysis on stocks, bonds, and commodities and provides high-quality market intelligence in the form of credit ratings, research, and thought leadership. 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. 

For more information on Carrollton’s fiscal status, visit

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