Cambridge Earns Three Triple A Ratings for 11th Consecutive Year
City Manager Robert W. Healy announced that Cambridge has continued its rare distinction of being one of approximately 23 cities in the nation to earn three Triple A ratings from the nation’s three major credit rating agencies. The City has received Triple A ratings from Moody’s Investors Service, Standard & Poor’s and Fitch Ratings every year since 1999.
“We are extremely proud that we can still achieve this high honor, especially in light of the challenging financial climate we have been operating in these last few years,” said Healy. “These ratings enable us to maintain our strong fiscal position and continue funding important capital projects and programs. Most importantly, it enables us to support the City Council goal of “Evaluating City expenditures with a view of maintaining a strong fiscal position and awareness of the impact on taxpayers.”
These ratings are in conjunction with the City’s sale of $33.2 million in General Obligation bonds, which is scheduled to take place on February 16, 2010 to finance such capital projects as the CRLS Renovation, Sewer Reconstruction and soil remediation related to the Yerxa Road Railroad Underpass Project.
Fitch Rationale for Cambridge’s Triple A Ratings Assignment:
The city’s exceptional financial management is reflected in consistently strong financial results and reserve levels. The stable presence of higher education, healthcare, biotechnology and life sciences industries underpins a deep, diversified, and wealthy economy. Debt levels are expected to remain manageable, aided by the city’s rapid amortization rate.
Key Rating Drivers
Ongoing sound financial management, which has benefited the city’s financial position.
Continued growth of the city’s diverse, strong economy.
Moody’s Investors Service Rationale for Cambridge Triple A Ratings:
The assignment of Moody's highest quality long-term rating reflects an exceptionally strong and resilient financial position which positions the city to weather uncertain economic conditions more favorably than most similarly-sized cities. Additional factors supporting the Aaa rating are management's consistently conservative approach to budgeting, a large and diverse tax base with a significant tax-exempt sector and a favorable debt profile supported by healthy enterprise systems and historically strong commonwealth school building aid.
Standard & Poor’s
Rationale for Cambridge Triple A Ratings:
Strong and dynamic local economy, anchored by Harvard University and Massachusetts
Institute of Technology (MIT), as well as biotechnology and high-tech firms;
Above-average wealth and income factors, including a high market value per capita;
Very strong financial position, despite a decline in fiscal 2009, coupled with an experienced management team and strong management policies; and
Low debt burden and manageable capital plan.
In addition, Standard & Poor’s reaffirmed its “strong” Financial Management Assessment (FMA) of the city. An FMA of “strong” indicates that practices are strong, well embedded and likely sustainable. The strong rating indicates that the government maintains best practices deemed critical to supporting credit quality and that these are well embedded in the government’s daily operations and practices. Formal policies support many of these activities, adding to the likelihood that these practices will continue into the future and transcend changes in the operating environment or personnel.