Chattanooga will head to Wall Street next month to borrow $31.3 million for capital projects, boosted by a favorable assessment of the Scenic City from a top bond rating agency.
Fitch Ratings this week affirmed Chattanooga's AA+ rating, the second highest rating possible for such municipal bonds. The only higher rating possible from Fitch, AAA, is enjoyed by few municipalities. Hamilton County boasts the AAA rating from Fitch, however.
The city plans to price $31.3 million in general obligation bonds on Dec. 3 to help fund general and water quality capital projects.
In her bond rating for Chattanooga, Fitch analyst Barbara Ruth Rosenberg said Chattanooga's moderate debt and diverse economy make the city a good bet for lenders. The city has a per capita debt of $2,899 and ended last year with a $12.7 million surplus, equal to 5.8 percent of the city's total spending.
"Expenditure reductions coupled with historically conservative budgeting and a willingness to raise revenues have enabled the city to maintain sound reserves and financial cushion," Rosenberg said.
But the Fitch analyst said Chattanooga's city jobless rate of 9.2 percent in August was well above the U.S. rate and was actually up from a year ago despite a nationwide drop in the jobless rate. Chattanooga's poverty rate also was higher and per capita income lower than the U.S. as a whole.
Nonetheless, Fitch also affirmed a top AA+ rating for Chattanooga's outstanding $171.7 million of general obligation bonds, which carry the full faith and credit of the city.
Mayor Andy Berke said the Fitch ratings "affirms the city of Chattanooga's strong fiscal health.
"We work hard to provide the most effective, efficient services at the best value to taxpayers and this high rating is a result of our efforts," he said in a statement.
Contact Dave Flessner at firstname.lastname@example.org.
Dave Flessner is the business editor for the Times Free Press. A journalist for 35 years, Dave has been business editor and projects editor for the Chattanooga Times Free Press, city editor for The Chattanooga Times, business and county reporter for the Chattanooga Times, correspondent for the Lansing State Journal and Ingham County News in Michigan, staff writer for the Hastings Daily Tribune in Nebraska, and news director for WCBN-FM in Michigan. Dave, a native ...