City of Burlington, Vermont City of Burlington, Vermont

City Hall, 149 Church Street, Burlington, VT 05401
Call Us 802-865-7000 M-F 8-4:30pm   Email Us

 

Moodys Investors Service Upgrades Burlingtons Credit Rating, Improves Rating Outlook

FOR IMMEDIATE RELEASE
March 4, 2015
Contact:  Mike Kanarick
                   802.735.7962
 
Moody's Investors Service Upgrades Burlington's Credit Rating, Improves Rating Outlook
Upgrade Demonstrates Strengthened City Financial Position; Will Save Taxpayers Money
 
Burlington, VT – Moody’s Investors Service yesterday upgraded Burlington’s credit rating for both the City’s General Obligation Bonds and Certificates of Participation, and Moody’s improved the City’s rating outlook to positive from stable.  This is the City’s first rating upgrade since Moody’s began downgrading the City’s rating in July 2010, and the first positive outlook in at least 10 years (please scroll down to view Burlington ratings table).  In its Rating Update report, Moody’s stated:  “The positive outlook reflects a trend of balanced financial operations over the last two years, which will likely continue over the near term.”  The improved credit rating will allow the City to incur lower borrowing costs, which will save Burlington taxpayers and ratepayers significant money over time. 
 
“This positive news validates our community’s hard work over the last three years,” said Mayor Miro Weinberger. “A higher credit rating means lower interest rates for the City and real savings for Burlingtonians.  While we still have a lot of hard work left to fully restore the City’s financial standing, today’s upgrade represents meaningful progress.  I can’t think of a better way to start the next three years.”
 
Moody’s decision to upgrade the City’s General Obligation Bond credit rating to Baa2 from Baa3 impacts $99 million in rated long-term debt.  Moody’s also upgraded $2 million of Certificates of Participation (Series 2000) to Baa3 from Ba1 and $6.8 million of Certificates of Participation (Series 1999A and Series 2005 (parking)) to Ba1 from Ba2.
 
Highlights from the Moody's report include:
 
  • “The upgrade of the city’s general obligation rating to Baa2 from Baa3 reflects an improved financial position, although reserves and liquidity remain narrow. The upgrade also incorporates the dismissal of the Burlington Telecom (BT) lawsuit through a settlement agreement that is favorable to the city.”
 
  • “Additionally, the dismissal of the BT lawsuit and favorable settlement reduces the risks related to the enterprise. The settlement has also allowed the city to address the large nonspendable, advances to BT from the General Fund.”
 
  • “The city has improved its financial position through the issuance of deficit financing bonds, conservative budgeting and proactive revenue and expenditure enhancements which are expected to result in balanced operations over the near term. After a $9 million issuance of deficit financing bonds in April 2013, the city has stabilized its cash flow and operations, resulting in a two-year trend of operating surplus.”
 
  • “The fiscal 2014 audited financial statements include an unqualified auditor’s opinion for the first time since before BT’s financial problems became publicly known in late 2009 and reflects an operating surplus of $2.5 million, excluding a special item of $16.9 million, representing a write-off of city advances to BT following the dismissal of the BT lawsuit.”
 
*Please find the Moody’s Rating Update report here.
 

 

Moody's Investors Service Ratings -- City of Burlington

Date

Action

Rating

Action

Outlook

         

03/03/15

Upgraded

Baa2

Revised

Positive

04/14/14

Affirmed

Baa3

Revised

Stable

08/20/13

Affirmed

Baa3

Affirmed

Negative

04/12/13

Affirmed

Baa3

Affirmed

Negative

09/20/12

Affirmed

Baa3

Affirmed

Negative

06/20/12

Downgraded

Baa3

Affirmed

Negative

03/08/12

Placed on Watchlist for Possible Downgrade

09/16/11

Affirmed

A3

Affirmed

Negative

01/07/11

Downgraded

A3

Affirmed

Negative

07/09/10

Downgraded

A2

Revised

Negative

03/09/10

Placed on Watchlist for Possible Downgrade

07/31/09

Affirmed

Aa3

Affirmed

Stable

04/09/09

Affirmed

Aa3

Affirmed

Stable

12/07/07

Affirmed

Aa3

Affirmed

Stable

09/22/06

Affirmed

Aa3

Affirmed

Stable

06/09/05

Affirmed

Aa3

Affirmed

Stable

         

Source:  Moody's Rating Reports

   

 

# # #

Press Release Date: 
03/04/2015
City Department: 
Mayor's Office