Moody’s Investors Service has upgraded Providence’s long-term bond rating from “Baa-1” to “A3,” the highest bond rating for the city since the early 90s. Moody’s also gave the city “a positive outlook” and cited “improved financial reserves and increased financial flexibility and continued progress on the funding of the city’s annual pension liability.”
Providence’s improved credit rating means the city can borrow money at a lower rate, resulting in savings for taxpayers, Mayor David N. Cicilline announced Monday. The city previously received bond-rating upgrades from Standard & Poor’s and Fitch Ratings.
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According to a report released by Moody’s, the municipal bond rating agency believes “that the city’s financial position has and will continue to benefit from prudent fiscal management.” The report also cited the city’s progress toward meeting its pension obligation. “Moody’s expects the city will achieve its goal of funding pensions at 100 percent of actuarially recommended levels no later than fiscal 2007 (at 96 percent as of fiscal 2006),” the report stated.
Moody’s also cited the city’s economy and said it “believes sustained development and revitalization efforts benefiting from public, not-for-profit and private support positions the city to realize additional tax base expansion.”
