11-22-2010 South Bend’s bond rating rises again

Home Browse Search

Office of the Mayor NEWS RELEASE November 22, 2010 11 a.m. South Bend’s bond rating rises again Fitch Ratings affirms AA+, changes outlook to stable Contact: Mikki Dobski, Director of Communications & Special Projects, 235-5855 or 876-1564 or Gregg Zientara, City Controller, 235-9216 For the second time in 2010, a national credit rating agency has affirmed an improved bond rating for the City of South Bend. Fitch Ratings recently affirmed an AA+ rating on four bonds issued by the City of South Bend’s Redevelopment Authority and revised the City’s rating outlook from negative to stable. (In February, the Standard & Poor’s bond rating service upgraded the City’s bond rating to AA- from A+.) “The Outlook revision to Stable from Negative is based upon the City’s prudent response to the challenges presented by the recently implemented, statewide ‘Circuit Breaker’ legislation and its maintenance of sound financial operations despite the dramatic drop in property tax revenues triggered by the law,” according to a statement released by Fitch Ratings. “The City has relied upon a mix of expenditure cuts, along with an increase in various income taxes, to compensate for the revenue shortfall.” Fitch Ratings also noted that “maintenance of the City’s ample General Fund reserves, despite the challenging revenue environment, is key to the City’s rating.” Other identified factors included “tightened expenditure controls,” “well-maintained” financial operations, diverse employment and tax bases, and projected tax revenue that is sufficient to replace lost property taxes. The improved bond rating, coupled with a more favorable debt financing market compared with the original issue date, will result in a lower cost for the City to borrow, according to City Controller Gregg Zientara.