City Of Minneapolis: City's Bond Rating Upgraded Ahead Of Bond Sale

Press release from the City of Minneapolis:

October 27, 2021

Bond rating agencies S&P Global and Fitch Ratings have both revised the outlook for the City of Minneapolis ahead of a bond sale scheduled for today, reflecting confidence in the City’s financial planning efforts. 

S&P has issued a AAA rating with a revised, stable outlook for the City from a previous negative outlook. Fitch has issued a rating of AA+ with a positive outlook from a previous stable outlook. This upward movement in the outlooks reflect the City’s continued resilience during a challenging period and confidence in the City’s financial planning and economic conditions for the next few years. 

Rating agencies have applauded the City’s detailed five-year financial forecast. S&P Global noted in its summary: “The City has a fiscal roadmap in place that we believe sufficiently demonstrates how it will navigate the next few years while actively managing emerging and ongoing risks.”

The City will be selling $125.515 million in tax exempt general obligation bonds and $15.9 million in taxable general obligation housing improvement area bonds 10 a.m. today, Oct. 27.

Proceeds from the $125.515 million sale will fund various public facilities and infrastructure improvements, including buildings for utility and non-utility purposes as well as street improvements.  About half of this debt is funded by utility and assessment revenues and the other half by property taxes. Proceeds from the $15.9 million sale will fund repairs and improvements to housing units within the Summit House Housing Improvement Area, which includes two condominium towers in the Loring Park neighborhood that required major building systems replacement. Fees charged to benefitting property owners are scheduled to pay the bond debt service.  

“We’ve been intentional about taking a measured and honest approach to financial planning in our city. Our budgets prioritize financial resiliency and sustainability, while making crucial long-term investments in affordable housing, public safety and safety beyond policing, economic inclusion, and climate action,” said Mayor Jacob Frey. “This announcement recognizes the hard work of our finance team and the difficult choices we have made in response to the multiple challenges we have faced as a city. This positive ratings movement reinforces the decisions to prioritize fiscal responsibility and continue pursuing our core values to best serve our community.”

This press release was produced by the City of Minneapolis. The views expressed here are the author’s own.