PFLUGERVILLE, Texas – Moody’s Investor Services has increased the bond rating for the City of Pflugerville by three levels, from A1 to Aa1, the highest ever awarded to the city and the second highest rating that can be issued.
The city said its last rating took place when the city issued bonds in 2016 for projects approved by voters in 2014 and 2015. The city said according to Moody’s report, “the upgrade to Aa1 reflects elimination of the credit risk of a guaranteed loan and reflects the city’s large, growing tax base, trend of stable financial performance, elevated debt burden, and manageable pension burden.”
“The City of Pflugerville’s rating has gone up from upper medium to high quality grade, a significant accomplishment and compliment to the city as a reflection of good financial practices and growth,” Finance Director Amy Good said in a statement. “A high rating like this one can mean higher demands for our bonds and may result in lower interest rates and favorable bond pricing in future bond issues. This is a great reflection of our financial health and accounting practices.”
“When Pflugerville’s bond rating goes up, it reflects the steady improvements in the city’s financial procedures, and the scrutiny that the City Council and staff put into the budgeting process each year,” Assistant City Manager Lauri Gillam said in a release.
According to Moody’s, Aa ratings are listed on their long-term rating scale as “judged to be of high quality and are subject to very low credit risk.” Its rating scale goes from Aaa to C, and has “numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.”
Moody’s has long been considered one of the “Big Three” credit rating agencies. The Council on Foreign Relations said Moody’s, Standard & Poor’s (S&P) and Fitch Ratings together control around 95 percent of the credit ratings market.