The Town of Covington received an A1 credit rating from Moody’s Investors Service for the third consecutive year.
The A1 rating is one of the highest ratings a debt issuer can receive, classifying Covington’s general bonds as investment grade and subject to low credit risk. The rating strengthens the City’s ability to attract investors and new businesses to the City and would save taxpayers money in case the City has to incur additional long-term debt.
“There are so many positives in this report,” Covington Chief Financial Officer Steve Webb said. “The growing tax base, strong and improved financial position supported by formalized fiscal policies and manageable long-term liabilities are all highlighted.”
Webb said the city also received a G-1 score for governance, the highest possible score in that category.
“This score reflects strong institutional structure, fiscal management and demonstrated political effectiveness,” Webb said.
The report says the city’s financial position is sound and supported by conservative budget practices and strong fiscal policies, tighter spending control, and growth in the tax base.
Moody’s upgraded the city’s credit rating to A2 in 2019 and A1 in 2020 and gave the city a “positive outlook”.
In its latest credit analysis, Moody’s removed this “positive outlook”, saying the removal “reflects favorable trends in the City’s tax base and financial operations that remain appropriate for the current rating category, and will remain likely stable over the forecast period”.
In this way, Webb explained that the deletion was actually a good thing.
“It actually speaks to the stability of the strong financial position that the city has built over the last few years,” Webb said. “Essentially, reinsurance was no longer necessary given this stability.”
Town of Covington