Despite the inability of the Alaska State Legislature to adopt a comprehensive solution to the State’s fiscal crisis and the huge uncertainty that creates for both the private sector and local governments, at least one bond rating agency is looking more favorably upon the Municipality of Anchorage’s credit worthiness.
Mayor Ethan Berkowitz today announced today credit rating agency Standard and Poor’s (S&P) has reaffirmed Anchorage’s AAA bond rating (the agency’s best rating) and upgraded the Muni’s bond rating outlook from negative to stable. That outlook change means S&P no longer thinks Anchorage rating is likely to be lowered in the next six months to two years. As a result, Anchorage will continue to be able to borrow money at the cheapest interest rates available.
Here is Mayor’s statement on S&P’s decision complete with his administration’s required use of a form of the word “resilient” somewhere in all mayoral communications.
S&P Improves Outlook, Affirms AAA Bond Rating for Anchorage
ANCHORAGE — S&P Global Ratings recently improved Anchorage’s bond rating outlook from negative to stable and reaffirmed its AAA bond rating. An AAA bond rating with a stable outlook is the highest rating that the S&P grants to local governments.
“Our improved outlook reflects our fiscal strength and resiliency,” stated Mayor Ethan Berkowitz.
The improvement to a stable outlook reflects the Municipality’s budgetary flexibility and steadiness, despite the uncertainty at the state level. S&P noted Anchorage’s efforts to diversify its economy as a reason for the improvement.
“Anchorage is a great investment and we are pleased S&P agrees,” said Anchorage CFO Robert Harris.
Under current borrowing conditions, a rating downgrade would cost Anchorage an estimated $690,000 on a typical municipal bond issuance over 20 years.