City Of Douglasville Receives S&P Bond Rating Upgrade

Press release from the City of Douglasville:

Post Date:05/20/2021 10:31 AM

S & P Global Ratings announced recently that the City of Douglasville has raised its long-term and underlying ratings to “AA” from “AA-“on Douglasville’s outstanding general obligation (GO) debt. The AA rating signals to investors that the city’s capacity to repay is very strong and the outlook is stable.

“The rating change reflects growth in the local tax base, which resulted in per capita market values growing nearly $28,000 since 2018 (to more than $115,000),” said S&P Global Ratings credit analyst Christian Richards.

In addition, the city has consistently added to reserves, with available reserves doubling to $17.4 million from $8.7 million between fiscal years 2016 and 2020 or increasing from 34% of expenditures to 54% over the same time.

“The higher rating means that the City has excellent creditworthiness,” explained Karin Callan, City of Douglasville’s Finance Director. “This means that the city can borrow money at a lower interest rate and save money in interest expense. This is great news considering that we are preparing to issue bonds soon for the City Amphitheater project.”

The outstanding GO debt is secured by ad valorem taxes that may be levied, without limit as to rate or amount, on all taxable property within its jurisdiction. The GO equivalent debt is limited obligations payable solely from amounts paid to the authority pursuant to an intergovernmental contract between the authority and the city. Under the contract, Douglasville’s obligations are absolute and unconditional, and it has agreed the levy and unlimited ad valorem tax on all property subject to taxation for repayment. Therefore, the long-term rating on the issue is based on the GO pledge of the city.

“Receiving this new credit ranking shows that the City of Douglasville is heading in a positive direction and our city’s economy, even during the COVID pandemic, has had positive growth,” said Mayor Rochelle Robinson. “This is a good thing for our economy and moving forward with all of our exciting projects.”

S&P analyzed the city’s environmental, social, and governance (ESG) risks and opportunities relative to its economy, management, budgetary outcomes, and debt and liability profile in order to come up with the rating. They view them as being in line with those of the sector.

This press release was produced by the City of Douglasville. The views expressed here are the author’s own.