Moody's Upgrades Covington's Credit Rating
The City of Covington’s bond credit rating was upgraded by Moody’s Investors Service on Wednesday morning.
Moody's boosted the city's credit rating to "A3 low credit risk with a positive outlook" from its previous raring of Baa1. In 2014, the City of Covington saw its credit rating lowered from A2 to Baa1 three months after its former finance director had been arrested for stealing approximately $800,000 from the coffers. In July 2016, Moody's changed the city's credit rating outlook back to positive.
Moody’s based the city’s rating on various detailed considerations, including the city’s strengthened balance sheet positioning, continued use of annual surplus monies to bolster reserves, and improved fiscal management practices in accordance with the city’s Fiscal Stability Ordinance, a news release stated.
“This is good news for the city. The city continues to make progress turning around its financial condition," said Mayor Joe Meyer, in a statement. "The bond credit rating upgrade recognizes the progress made to date. The positive outlook anticipates that more progress will be made in the years ahead.”
Moody’s noted specific financial strengths used to determine the city’s bond credit rating, including the large tax base located in the Cincinnati metro area as well as the city’s improved financial position.
“The City is extremely pleased to learn of its upgraded Moody’s bond credit rating and we will continue our efforts to improve our financial position,” said interim city manager Loren Wolff.
As stated in the Moody’s report, the positive outlook reflects Moody’s expectation that the city will continue to improve its financial positioning through cash reserve levels, creation of additional policies, operational sustainability and close management of expenditures, a news release said.
Moody’s believes years of materially improved financial operations could lead to another upgrade in rating, as this typically indicates a higher likelihood of rating change.
Moody’s Investors Service is a bond credit rating business that provides international financial research on bonds issued by commercial and government entities.
To view the City of Covington’s Moody’s Report, click here.