September 10, 2019 | From City of New Orleans
City of New Orleans Earns Credit Upgrade from Moody’s
NEW ORLEANS — The City of New Orleans’ bond rating today was upgraded by Moody’s Investors Service to an A2 rating from A3. In 2019, the City is going to issue $50 million Taxable Improvement Bonds, which also received an A2 rating from Moody’s. The outlook for the City’s financial future, Moody’s said, is stable.
"Since taking office last May, financial stabilization was a key goal for my Administration. We have consistently demonstrated key steps towards stabilizing our financial structure for the City of New Orleans. We have been laser focused on managing our expenses, as it relates to our revenue. Implementing key technology upgrades and process improvements, getting our 'Fair Share' for our city," said Mayor LaToya Cantrell. "This was a goal we had set for ourselves for our first term in office to complete in four years, but we’ve been able to do this in less than a year and a half. I’m so proud of this major accomplishment for the City of New Orleans."
“This upgrade reflects a strong financial position and conservative debt management strategy. We've worked really hard in the last year to move management of the City and especially its finances to a higher level, and this is outside affirmation from a national, independent agency that we're succeeding," said Chief Administrative Officer Gilbert Montaño. "This is a strong a first step but there is still more work to do.”
“Although this reflects great news for the city’s financial program, it’s up to us to remain vigilant and continue to pursue the programs we have laid out for more upgrades in the future. We will continue to manage the City’s dollars in the most fiscally responsible way possible,” said Chief Financial Officer Norman White.
According to Moody’s, this stable outlook reflects expectation that the growing economy and tax base and management’s willingness to maintain adequate reserve levels and balanced operations despite budgetary challenges such as high fixed costs and public safety and infrastructure needs will allow the City’s credit profile to remain stable.
Some of the factors that could lead to a credit rating upgrade include continued balance operations and material improvement in reserve levels, and significant expansion and diversification of the local economy.
“The City’s recent history of conservative budgeting, improved financial performance, and financial policies will likely support a stable financial profile that is better prepared to weather future environmental events,” Moody’s said in its summary. “A key challenge for the credit profile is significant environmental risk given its location along the Gulf of Mexico, including hurricanes, rising sea levels and heavy rainfall. Significant infrastructure improvements by the federal government in particular have improved key flood protection systems, but a large amount of capital investment is still needed and planned.”
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