Financial Health: Moody’s Reaffirms South Milwaukee’s Aa2 Bond Rating

Moody’s has reaffirmed the city’s strong Aa2 bond rating, as part of its review of the recent $2.7 million refinancing of debt in tax incremental districts 1 and 2.

From the Moody’s press release

moodysThe Aa2 rating reflects the city’s mature, landlocked tax base near the City of Milwaukee (A1 stable); healthy financial position; above average debt burden with rapid principal amortization; and moderate pension liabilities.

So, generally really good news, with some watchouts around risk factors like “deterioration in the city’s tax base and/or demographic profile, material declines in available reserves and liquidity and increases to the debt or pension burden” — common items for communities like ours from ratings agencies.

For more context, I asked Jeff Belongia, our longtime bond counsel from Hutchinson, Shockey, Erley & Co., for his thoughts at Tuesday’s council meeting.

He said we are a solid Aa2, two steps away from a top AAA rating, and cited our strong financial management practices, more-than-adequate cash reserves, and our “proactive” approach to revitalization of the city, especially the former Bucyrus campus, of which rating agencies have taken notice.

“You are in a really good position,” he said. “The city is doing a good job.”

From our city administrator, clerk and treasurer, to our common council, I thank all of the city staff and elected officials who have gotten us to this point, and I look forward to building on this strong financial foundation.

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