Contact: Thea Setterbo, 210-207-7349
Spanish media: Carlos Valenzuela, 210-207-3919
SAN ANTONIO (July 28, 2017) – The City of San Antonio continues its legacy of maintaining strong financial management after having its ‘AAA’ general obligation bond rating reaffirmed by the three major bond rating agencies – Standard and Poor’s, Fitch and Moody’s – for the eighth straight year.
“The ‘AAA’ bond rating is one way San Antonio residents can clearly see local government working for them,” Mayor Ron Nirenberg said. “For the past eight years, our City Manager and her financial team have worked with City Council to attain this rating, which provides millions of dollars in savings. It’s no overstatement to say that the City of San Antonio is a shining example when it comes to managing taxpayer dollars.”
San Antonio remains the only major city with a population of more than one million to have a ‘AAA’ bond rating from any one of the major rating agencies. The ‘AAA’ bond rating allows the City to pay the lowest possible interest rates in the market, which means the City can spend less on interest to repay the debt and more on street construction and other capital improvements.
“Earlier this year, our residents showed their confidence in City government by voting to approve the largest municipal bond program in San Antonio’s history,” City Manager Sheryl Sculley said. “Receiving the ‘AAA’ general obligation bond rating year over year allows us to continue delivering much needed capital projects without increasing the property tax rate.”
Taking immediate advantage of the highest possible credit rating, the City is selling $203.3 million in bonds, certificates of obligations and tax notes next week. The sale includes $100 million in bonds, which is the first issuance of the voter-approved 2017-2022 Bond Program.
Standard & Poor’s notes the City’s “very strong budgetary flexibility and liquidity, which is supported by very strong management” in their assessment of the ‘AAA’ bond rating. According to Fitch, among the factors contributing to San Antonio’s ‘AAA’ bond rating are its “strong revenue flexibility and growth prospects, minimal revenue volatility and superior financial resilience.” Moody’s cites “the strong and vibrant economy, anchored by diverse sectors and stabilized financial operations with significant revenue raising flexibility.” S&P added that they “do not expect to change the rating during the two-year outlook period because they believe the City will maintain very strong reserves.”
While the credit rating agencies cite San Antonio’s revenue flexibility in the justification for reaffirmation, the Texas Legislature continues to advance proposals that would cap the City’s ability to generate future revenues, potentially threating its financial stability.