Monday, March 13, 2017

Fitch Reaffirms City's AA+ Credit Rating


Fitch Ratings, one of the three nationally recognized credit rating agencies for municipal governments, published their annual review of the City of Richmond following a visit to their New York office last month by Mayor Levar Stoney, City administration leaders and representatives from the City’s financial advisor, Davenport & Company LLC.

Fitch reaffirmed the City’s “AA+” credit rating, which is considered highly rated and one notch below “AAA,” the highest possible rating attainable.  According to Fitch, “The 'AA+' Issuer Default Rating reflects the city's strong operating performance and financial resilience, a solid revenue framework and a liability burden at the low end of the moderate range, all supported by a growing economic base.”

Fitch assigned their “aa factor assessment” to the City’s Revenue, Expenditure and Long-Term Liability Burden, while assigning their “aaa factor assessment” to the City’s Operating Performance, citing “The combination of revenue and expenditure flexibility, supplemented by reserve funding, should enable the maintenance of a high level of financial flexibility during cyclical economic downturns.”
          
“I was pleased Fitch has concluded our City’s economy is gaining strength from education and health services, after being dominated by the government sector,” said Mayor Stoney. “The fact our economic development efforts have contributed so strongly to our positive credit rating also emboldens us to continue with the ongoing revitalization of Richmond.”

Fitch cited Richmond as a growing metropolitan area and regional center for employment and cultural amenities.  In assessing the City’s credit profile, Fitch found, “Economic development efforts are focused upon leveraging additional growth in the life-sciences sector, enhancing a solid financial services sector and redeveloping select city neighborhoods.” Richmond’s Chief Administrative Officer Selena Cuffee-Glenn added, “Our attention to key financial best practices and growth in economic development proved to be key drivers in Fitch’s analysis.”

Davenport’s Senior Vice President and Manager of Public Finance, David Rose, concluded “Fitch was clearly impressed by the Mayor’s vision for the City and his approach to making Richmond the best it can be.  This report demonstrates Fitch’s comfort with the new mayor.” Fitch’s summary can be read here.