Mayor Walsh announces City of Boston achieves AAA bond ratings for the seventh consecutive year
Mayor Martin J. Walsh today announced that Boston has again maintained triple-A bond ratings, as assigned by Moody's Investor Service and S&P Global Ratings, in advance of its 2020 bond sale. Since 2014, the City has continued to receive the top credit rating from both rating agencies. The agencies' affirmations of Boston's strong financial health is a recognition of the City's fiscal management during the COVID-19 pandemic. According to a study published by the National Tax Journal, Boston is the municipality best prepared for the economic impact of COVID-19.
"I am pleased that Boston has achieved the highest bond ratings for the seventh consecutive year," said Mayor Walsh. "This rating is a testament to our city's strong financial health, and will allow us to continue our investments in programs and policies that better our city's future. As we continue to face the economic impact of COVID-19, Boston is prepared to manage through it with strong fiscal oversight."
According to Moody's Investor Service, Boston's triple-A rating reflects the City's strong fiscal management and stable financial position, as well as its large and growing tax base with economic diversity bolstered by significant government, higher education and healthcare sectors. The rating accounts for Boston's conservatively managed debt profile and its planning efforts with respect to its pension obligations.
In their report, S&P Global Ratings cites Boston's "very strong" economy as a driver for its triple-A rating. This includes the city's central location, talented and diverse workforce, and expansion of financial and technology sectors. The report also notes the City's history of proactively addressing future challenges related to climate change, transportation, and affordable housing through the implementation of Mayor Walsh's Climate Ready Boston, Go Boston 2030, and Housing a Changing City.
"Under Mayor Walsh's leadership, Boston continues to be a city with an exemplary fiscal foundation," said Emme Handy, Chief Financial Officer for the City of Boston. "In Boston, we embrace long-term financial planning to ensure we maintain essential City services and provide for critical investments."
The City expects to go to market on the sale of its 2020 series bonds the week of December 7, 2020 with Bank of America Securities leading the transaction and Siebert Williams Shank & Co., a minority business enterprise, as transaction co-lead. This is the first time in at least 15 years the City has entered the market using a negotiated method of sale, allowing it to sell bonds directly to individual investors as well as institutional investors.
This transaction is expected to come in a combined issuance of $270 million in new money and refunding bonds. The City intends to issue $35 million of this amount for Social Bonds, which will support the financing of certain affordable housing projects, in partnership with the Boston Housing Authority throughout the city, and $25 million for Green Bonds, which will support energy-efficient and environmentally friendly projects in Boston. The Green Bonds, specifically, will support the mitigation of sea-level rise at the Boston Center for Youth and Families Curley Community Center, phases one and two of the Renew Boston Trust, which seeks to make City buildings more energy efficient, climate resiliency aspects of the Langone Park/Puopolo Playground renovation, and construction of the New Boston Arts Academy built to LEED Silver standards. Note that any offer or solicitation with respect to the Bonds will be made solely by means of a preliminary or final official statement.
These ratings build on Mayor Walsh's commitment to financial responsibility throughout the City of Boston. The City maintains a dedicated investor outreach platform, BuyBostonBonds.com. The website is a part of the City's continued efforts to optimize financial disclosure and is designed to drive investment in Boston's bonds, which help pay for capital projects and investments the City makes.