Moody’s upgrades Providence outlook to stable, affirms Baa1 and Baa2 debt ratings

PROVIDENCE – Moody’s Investors Service Inc. has affirmed Providence’s Baa1 general-obligation debt rating and Baa2 lease-revenue debt rating but has revised the outlook on the city’s ratings from negative to stable, the financial services company announced June 19.

The stable outlook indicates the company does not believe the city’s credit ratings will change for 12-24 months. Moody’s rates approximately $466 million in debt for Providence.

Baa1 and Baa2 are the company’s eighth- and ninth-highest credit ratings. The Baa rating denotes moderate credit risk but is generally considered investment grade.

The service said the upgrade from negative outlook to stable outlook was driven by the city’s recently improved financial position, high but manageable fixed costs and the stability of the city’s economy. It noted the city’s operating fund reserves went positive in fiscal 2017, after a deficit from fiscal 2012 to fiscal 2016. Moody’s attributed the surplus to growth in property tax revenue and tax-base growth.

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