Philadelphia, April 4, 2012 – Standard & Poor’s Ratings Services has raised its long term rating and underlying rating on the City of Philadelphia’s general obligation debt from BBB to BBB+ with a positive outlook.
Mayor Michael A. Nutter cited the rating upgrade of the City of Philadelphia as further evidence that the City is making progress in managing its finances as the impact of the recent recession recedes.
“This announcement by S&P is great news for the City, for its citizens and businesses,” Mayor Nutter said. “It’s a validation of the steps we have taken and continue to take to maintain fiscal integrity while providing high quality services to citizens and better managing our government. It will help us save money when we go into the bond market.”
In the S&P release, issued yesterday, the rating agency noted, “The upgrade reflects Standard & Poor’s assessment of the city’s progress in eliminating a large general fund deficit in fiscal 2011 and projected fund surplus in fiscal 2012.”
While the City continues to face difficult fiscal challenges, Mayor Nutter praised the teamwork and collaboration of all the major decision makers involved in the City’s fiscal management.
“Managing the City’s finances has been a full city effort – City Council, the Administration and most importantly the taxpayers of Philadelphia who provided support for some very difficult decisions.
“We all appreciate that a highly respected rating agency is reaffirming our financial progress and the strong but difficult decisions we made in the early days of the Great Recession, which forced a series of tough choices, sometimes very controversial. Our fundamental premise was and is to maintain fiscal integrity, preserve our core services, protect our vulnerable populations and do nothing to damage government and our ability to recover and make progress,” the Mayor said.
S&P credit analyst Nicole Ridberg noted in the release that if the economic recovery slows in the near future, “Philadelphia’s strong management practices will allow it to continue to take the necessary actions to address imbalances and balance its five-year plan.”
According to the S&P release, the rating upgrade also reflected S&P’s view that City possesses a “proactive administration that has taken action to rebalance operations during a difficult recession,” the fiscal oversight of the Pennsylvania Intergovernmental Cooperation Authority and the discipline required by maintaining a Five Year Planning process, and a diversified economy with resilient sectors like health care, higher education and services.
City Treasurer Nancy Winkler, who is responsible for managing and overseeing $3.7 billion in City general fund debt, said, “This upgrade confirms that the City is heading in the right direction. It recognizes the Administration’s hard work to keep the city on course for fiscal balance.”