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Germantown again earns triple-A bond rating

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Two major bond rating agencies, Standard & Poor’s and Moody’s, have again awarded the highest possible bond ratings for the City of Germantown. The reaffirmation of Germantown’s triple-A rating, awarded to the City by Moody’s since 1987 and Standard & Poor’s since 1994, occurs as the City prepares to issue up to $16 million in new bonds and refund and refinance $5.5 million from 2006 and 2009 series bonds.
“We never take our bond rating for granted. It’s the result of adherence to our strong financial policies and the city’s healthy economic base. We are proud of this recognition and what it means for our community,” said Mayor Mike Palazzolo. City Administrator Patrick Lawton added, “The triple-A rating translates to low interest rates when we must borrow money for major projects. However, the value of the agencies’ assessment goes beyond that–two independent, objective and highly credible sources are confirming that our fiscal policies and actions are aligned with the best municipal government practices for sustainability.”
The triple-A rating is the highest possible rating that can be given to a municipality and allows the City to secure financing at a lower interest rate. The rating indicates to investors that the City has an extremely high capacity to meet its financial commitments. Both Moody’s and Standard and Poor’s cited the City’s large diverse tax base, active financial management, stable reserves and liquidity and low debt and pension burdens as the rationale for awarding the triple-A rating to the City of Germantown.
The new bond issue will fund school construction projects including an addition at Riverdale School designed to allow for the removal of 20 portable classrooms. City projects covered by the funds include drainage improvements and stormwater-related projects throughout the City. In addition, the City plans to take advantage of an opportunity to save debt service costs by refunding General Obligation bonds first issued in 2006 and 2009.
This issuance of approximately $5.5 million in General Obligation Refunding Bonds is in keeping with the City’s strict financial policies and will not affect the maturity date for the debt.