Standard & Poor’s has assigned a AA+ long term credit rating to the City of Carmel as part of a financial assessment in anticipation of bond sales to be held soon for a 2016 multi-purpose bond issue. The result of the positive rating will save millions of dollars in interest payments during the life of the bond.
According to S&P’s rating criteria, the rating indicates Carmel has a very strong economy, strong budgetary flexibility, strong management supported by good financial policies and practices, a strong budgetary performance and very strong liquidity providing very strong cash levels to cover both debt service and expenditures, which S&P considers exceptional.
The AA+ rating is the second highest rating possible for S&P, which rates on a scale from AAA to BBB- on investment grade risk of issuers and issues worldwide. The AA+ rating indicates “very strong capacity to meet financial commitments” according to S&P. More information on that can be found at https://www.standardandpoors.com
The rating comes as the Carmel Bond Bank prepares for a bond sale which could take place next week to finance a long list of public improvement projects, including the 96th and Keystone interchange, new roundabouts and other infrastructure projects.
“After a very intense and detailed look at our financial situation, I was very pleased that this independent rating agency recognized Carmel for our strong fiscal health,” said Carmel Mayor Jim Brainard. “We work very hard to monitor the city’s financial health, working from a 10-year fiscal plan that is regularly updated and helps us be fiscally responsible when it comes to our redevelopment activity.”
In its report, S&P noted the city’s management as strong with good financial policies and practices. It also noted that Carmel reviews multi-year trends and consults with financial professionals, local businesses and government officials and that the city regularly updates its long-term fiscal plan.
S&P also affirmed a previous AA+ rating for the 2014 bond issue by the Carmel Redevelopment Authority.
“This is great news for the City of Carmel and our newly established Carmel Local Public Improvement Bond Bank. These ratings confirm that Carmel remains a solid investment and continues to be focused in the right direction,” said Carmel Clerk-Treasurer and Carmel Bond Bank Executive Director Christine Pauley.
S&P’s ratings are meant to provide a reflection of the fiscal climate of a sovereign government and are based on the willingness of an organization or government to pay its financial obligations to creditors. It is essentially a credit rating of the city.
Standard and Poor’s Corporation is an independent, global company that provides corporate and municipal ratings for communities around the world. The bond markets rely upon their ratings, and Standard and Poor’s uses measurable, unbiased criteria for the basis of the rating in the following categories: local economy, budgetary flexibility, financial management, budgetary performance, liquidity, and debt.