Upgrade: Moody’s labels city credit outlook as ‘stable’

By Erich Wagner (File Photo)

Moody’s upgraded the city credit outlook from “negative” to “stable” last month along with 36 other local governments and four states.

Laura Triggs, the chief financial officer of the city, was happy to hear the news but joked that the timing could have been better from the credit ratings agency.

“I just wish we would have gotten the upgrade two days earlier,” Triggs said. “The upgrade came down July 19, but we went to the market [to sell bonds] on [July] 17.”

Triggs said the process went smoothly: The city sold $63.8 million in AAA-rated bonds for capital and school improvements to Bank of America and fielded bids from at least eight different lenders. The bonds have a 3.265-percent interest cost over the life of the loans, and Triggs said that the rate likely would not have differed even with the better credit outlook.

“If I were in the market, I’d be doing a different job, but looking at who the bidders were, they’re people who knew what they were doing,” Triggs said. “If there were any issues, they wouldn’t have been there.”

Moody’s slapped the negative outlook onto Alexandria and other local governments with strong ties to Washington in 2011, after it downgraded the federal government’s rating during the debt-ceiling debate. Last month’s shift coincides with the agency’s decision to restore the federal government’s stable outlook, which was linked to declining federal budget deficits.

“At the time, Moody’s indicated that if the U.S. government rating were to move down, these [local] ratings would also be likely to change because of their economic sensitivity to federal spending cuts, dependence on federal transfers and exposure to a capital markets disruption,” the agency said in a statement.

The Commonwealth of Virginia, the City of Fairfax, and Fairfax and Arlington counties also saw improvements to their credit ratings.

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