Pawtucket Mayor Donald R. Grebien today announced that Moody’s Investor Services has affirmed the City’s A3 rating. The City is preparing to issue general obligation bonds to the Rhode Island Health and Educational Building Corporation (RIHEBC) for $18.5 million of school building renovations and improvements as well as to refund existing school bonds for savings. In September, the City’s general bond rating was upgraded two notches to A3 from Baa2 by Moody’s.
“Moody’s credit opinion is an acknowledgment of the City’s commitment over the past six years to improve our financial position,” said Mayor Grebien. “We are investing in our schools, roads, public safety, infrastructure, and pension obligations to provide the best services to taxpayers. I want to thank the Governor, the General Assembly, and the RI Department of Education for their continued prioritization of school improvements. While we still have work to do, I am committed to ensuring that our finances and bond rating continue to improve, which will lower our borrowing costs.”
The RIHEBC bonds are funding the renovations at Potter Burns and Nathanael Greene Elementary Schools, as well as numerous health and safety upgrades district-wide. Projects include fire safety upgrades, accessibility improvements, and security enhancements at entrances. The refunding component of the transaction is projected to save debt service costs in future years, which will reduce the City’s fixed costs. Savings will be shared with the RI Department of Education, which reimburses the City 80 to 87% on bonds issued for school purposes.
The Moody’s report listed a number of credit strengths including, but not limited to, the following: improved financial position, four consecutive years of improvement in its operating funds, low taxpayer concentration, and the City’s new minimum fund balance policy
Finance Director Joanna L’Heureux added, “the affirmation of the City’s A3 rating is attributable to our strong management practices, improved financial position and maximization of state reimbursement for school construction projects. The rating also acknowledged recent pension reforms and the potential for further economic development as part of the construction of the commuter rail station.”
FOR IMMEDIATE RELEASE
June 7, 2017
Contact: Lauren Greene
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- Don Grebien