Credit rating agencies reaffirm City’s Bond Ratings

Published on August 07, 2023

Credit rating agencies reaffirm City’s Bond Ratings and Fitch revises outlook to positive

SAN ANTONIO (August 4, 2023) – The City of San Antonio’s ‘AAA’ general obligation bond ratings were reaffirmed this week by Standard & Poor’s and Moody’s Investors Service.  Fitch Ratings announced last week that it had reaffirmed the City’s ‘AA+’ bond rating and revised its outlook to positive from stable.  Rating outlooks fall into three categories: stable, positive, and negative.  This positive outlook change provides additional information to lenders, investors, or other users about the expected direction of rating movement in the near to medium term.  The City’s current financial performance and other related criteria could lead to a potential future rating upgrade.

“This is great news for everyone in the City of San Antonio,” Mayor Ron Nirenberg said. “The hard work of my Council colleagues and I with leadership from City Manager Erik Walsh and the entire City team will allow us to pay the lowest cost of borrowing to fund our improvements.”

The ratings come in anticipation of the sale of general obligation bonds, certificates of obligation and tax notes scheduled for the week of August 21, 2023.  

“San Antonio’s bond ratings are among the highest of any major city in the United States and enable us to borrow at the lowest possible interest rate,” City Manager Erik Walsh said. “I’m proud at the continued confidence by the rating agencies. Our strong operating performance and sound financial policies and practices keep us in an elite position.”

The City’s strong credit ratings which help to achieve the lowest cost of borrowing are as follows:

Below are some of the comments from the rating agencies’ reports:

Fitch Ratings pointed out the positive outlook “reflects the improved spending flexibility, aided by the favorable resolution of the CBAs for police and fire….and an improved carrying cost trend.”

S&P highlighted San Antonio’s “very strong management team, with robust and well-embedded policies and practices” and the City’s “history of solid budgetary performance, with very strong reserves and liquidity.”

Moody’s noted the City’s “long history of strong operating performance which has driven stable and favorable results guided by a sophisticated management team that employs long range financial and capital planning and frequent financial monitoring.”