Rating Agencies Give Portland High Bond Ratings

Moody’s and Standard & Poor’s assess Portland’s outlook as stable assigning Aa1 and AA ratings
Portland, Maine - Last week, Moody’s Investors Service and Standard & Poor’s Ratings Services released their rating assignments for the City of Portland. Moody’s assigned a bond rating of Aa1 with a stable outlook and Standard & Poor’s assigned the city a rating of AA also with a stable outlook.

Moody’s report heavily factored the city’s role as one of northern New England’s primary economic centers and Maine’s largest hub for employment and business activity. The stable outlook reflects the city’s recently improved financial position, which the company believes will remain constrained in the near term by limited growth potential in state aid such as General Purpose Aid for the schools, revenue sharing, and General Assistance reimbursements. The report identified several other strengths including the city’s carefully managed financial operations including conservative expenditures, adopted financial management policies including fund balance and debt management policies, the city’s diverse tax base with development potential and low long-term liability for pension. Of the challenges identified, Moody’s report focused upon limited revenue growth and the funding of infrastructure improvements to eliminate combined sewer overflows in compliance with the Clean Water Act.

“Since the downturn in the economy, the city has worked hard to establish sound financial footing that would help us weather the storm of the recession,” stated City of Portland Mayor Michael Brennan. “Receiving these high ratings affirms that we have been successful in our approach. Of course as identified by Moody’s there are some matters that are outside of the city’s control, specifically reductions in state aid. As the state’s economic and employment hub it is crucial that we work with our legislative partners to ensure that Portland’s economy can continue to thrive as the entire state benefits from our growth.”

According to Moody’s, the Aa1 rating reflects the importance of Portland’s $7.6 billion tax base as Maine’s largest city and economic heart of Northern New England. Portland serves as an important employment center for the region with an unemployment rate of 5.5% in October, well below both the state’s 6.7% and nation’s 7.5% average. The State of Maine’s rating is listed at Aa2 with a negative outlook by Moody’s and AA by Standard & Poor’s with a stable outlook. To view the reports, visit the city’s website at: http://www.portlandmaine.gov/financialreports.htm#financial