No More Junk Bonds: Woonsocket Bonds Now Rated 'Investment Grade'

WOONSOCKET, RI—Woonsocket's bonds aren't junk anymore. According to the mayor's office, Moody's Investment Services has upgraded the city's bond rating to Baa3 and said Woonsocket's outlook is "stable." The rating means Woonsocket's bonds are now "investment grade." That's a first since 2010.

By contrast, junk bonds are considered likely to be worthless, so an investor who buys them is taking a risk of losing the principle. To compensate for the risk, junk bonds have to pay a high interest rate.

“In 2013 we were mired in junk bond status with these rating agencies and there were those in Woonsocket who believed that our financial problems were so difficult to resolve that we should just give in and go bankrupt," said Mayor Lisa Baldelli-Hunt. "Instead of giving in - we dug in - and tackled our short and long-term fiscal issues with hard-work, disciplined financial management, sound budgetary practices and better, more efficient operations."

The mayor said Woonsocket's best days are to come.

Baldelli-Hunt also said the city does not plan to issue any new bonds.

“I view our 'investment-grade' bond rating as a promotional tool to attract new businesses and residents to our City," she said. "Our 'Baa3' Moody’s rating is another positive sign that we are a stable, well-managed municipality and it shouts-out to everyone that Woonsocket is a very desirable city to live, work and do business.”

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