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Moody's removes 'negative' outlook on city's credit rating
November 29, 2018 Hayleigh Colombo
Credit rating agency Moody’s affirmed the city of Indianapolis’ financial path under Mayor Joe Hogsett by revising its former “negative” outlook on the city’s overall Aaa credit rating to a “stable” outlook.
Moody’s also this week assigned an initial Aa2 rating to $30 million in revenue bonds issued this year by the Indianapolis Bond Bank to pay for long-term transportation planning.
Moody’s, in a press release, said the "stable outlook reflects our expectation for continued growth in tax base valuation and the maintenance of ample operating reserves." The city's Aaa rating is technically on $119.4 million of outstanding general obligation limited tax debt.
"These strengths should continue to offset credit challenges, positioning the city in the Aaa category for the foreseeable future," according to Moody's.
In a separate release, Moody's said its rationale for giving the Aa2 rating to the $30 million in new revenue bonds was “based on a diverse and growing revenue base that is anchored by” the city.
“Indianapolis sits at the center of a broad network of local and regional roadways, including four US interstate highways,” according to the Moody’s release. “This base should provide for continued growth in pledged revenues, which consist of a gas tax and other transportation-related revenue.”
Moody’s had previously rated all Indianapolis ratings as “negative” in 2015.
Hogsett, who spent the first two years of his administration trying to create a “structurally balanced budget,” cheered the news in a press release.
“This upgrade to our credit outlook affirms what we already know – Indianapolis is in a strong fiscal position,” Hogsett said. “Our strong rating and improved outlook is emblematic of our city’s commitment to consistent and cost-saving initiatives.
“In turn, these initiatives foster a climate that will continue to attract businesses, a talented workforce, and families who want to relocate to a city that is on firm financial ground and invests in its public safety, infrastructure and neighborhoods."