[Archived] Moody’s Upgrades Alexandria’s Credit Outlook to ‘Stable’

Moody’s Investor Service has upgraded the City of Alexandria’s credit rating outlook from “negative” to “stable” as a result of also moving the United States government’s ‘Aaa’ rating to a “stable” outlook on July 18. Alexandria was one of 37 local governments and 4 states that were elevated to “stable.”

Standard and Poor’s Rating Services, another major credit rating agency, continues to maintain its ‘AAA’ credit rating for the City. 

When Moody’s placed the U.S. government on “negative” outlook in 2011, it revised the outlooks of certain Aaa-rated municipal issuers to “negative” to reflect their close economic, financial and capital markets linkages to the federal government. Alexandria was one of those municipalities, due to its economic sensitivity to federal spending cuts, dependence on federal transfers and exposure to a capital markets disruption, according to Moody’s. Many of the other jurisdictions were also in the D.C. Metropolitan area.

According to Moody’s, the conditions that returned the U.S. government’s rating to a “stable” outlook also reduce Alexandria’s exposure to these risks.

The rating change, while welcome news, is expected to have little impact on Alexandria’s strong financial footing, as evidenced by the City’s recent successful bond sale. The City sold $63.8 million in ‘AAA’/‘Aaa’-rated general obligation bonds at a favorable overall 3.265% true interest cost over the life of these serial bonds to the winning bidder, Bank of America.

For more information on the federal government’s rating, visit www.moodys.com/USRatingActions.