[Archived] City of Alexandria Bonds Awarded "Double Triple-A" Ratings by Municipal Bond Rating Agencies


News Release
FOR IMMEDIATE RELEASE

Date:	Friday, January 15, 1999
Contact:	Michele Evans, Assistant City Manager, 703-838-4300; Lori Godwin, Director, Office of Management and Budget, 703-838-4780

City of Alexandria Bonds Awarded "Double Triple-A" Ratings by Municipal Bond Rating Agencies

The nation's two leading municipal bond rating agencies--Moody's Investors Service and Standard & Poor's (S&P)--today assigned their highest credit ratings (Aaa and AAA) to the City's upcoming 20-year, $40 million public improvement general obligation bonds, which will be sold on Wednesday, January 20, 1999.

The action by S&P reaffirms its 1991 decision to upgrade the City's rating to triple-A, at which time Alexandria became the 10th city in the United States to hold triple-A ratings from both S&P and Moody's Investors Service. Moody's upgraded the City to triple-A in 1986.

The rating agencies assign grades to municipal securities based on the city's expected ability to repay the debt. The higher the grade, the lower the interest rate the city must pay on its debt.

Standard & Poor's emphasizes four factors when assigning a "AAA" rating to a municipality: competent administration, effective debt management with moderate to low debt, a vibrant and diverse economy, and strong finances.

Moody's stated, "Moody's views favorably Alexandria's demonstrated history of conservative budgeting and sound financial practices and Moody's views as a credit strength Alexandria's very conservative debt issuance guidelines, and expects that debt levels will remain very manageable."

"The reaffirmation of the City's triple-A ratings really underscores the outstanding way the City has managed its finances during a difficult period," said James Traudt, Senior Vice President for Public Finance of Davenport and Company.

In commenting on the actions of Standard & Poor's and Moody's, Alexandria Mayor Kerry J. Donley said, "The triple-A ratings reflect our sound financial management, adequate reserves, and the success of our economic development efforts. The last time we talked to the rating agencies in 1994, we told them that, although we were a relatively built up city, we had tremendous development potential in the Eisenhower Valley, Cameron Station, the Winkler properties, and Potomac Yard. We are now able to report that we have substantial development occurring all four areas."

"Securing triple-A ratings from both agencies means the City can finance its bonds at the lowest possible interest rate," said Alexandria City Manager Vola Lawson. "Credit for this achievement goes to the Mayor and City Council for its sustained commitment to financial policies adopted in 1987 and reaffirmed in 1997, and to the City staff for their excellent work in carrying out these policies."

In the 12 years since the first set of financial policies was adopted, the City's outstanding debt per capita has declined by more than 75 percent, from $1,075 per capita on June 30, 1986, to $256 per capita on June 30, 1998; and debt service as a percentage of general government expenditures has declined from 9.8 percent in FY 1986 to 2.6 percent in FY 1998.