Fitch Rates Worcester Bonds 'AA-' With Stable Outlook
Fitch Ratings has given the City of Worcester high grades for more than $600 million in general obligation bonds, citing several factors in its assessment.
Fitch assigned an "AA-" rating to nearly $67.5 million in "municipal purpose loan bonds" that are being issued this year for water and sewer improvements, and scheduled to be sold Wednesday. The ratings agency also affirmed an AA- rating on $560 million in outstanding city bonds.
Fitch also called its rating outlook stable. It cited solid financial results over the past four fiscal years, noting "strong financial management, prudent fiscal policies and conservative budgeting practices." It also cited major development projects that are "contributing to measurable economic growth and are expected to boost taxable values."
But on the downside, Fitch said the city’s wealth levels are below state and national averages, and its unemployment rate remains high, but it noted that those levels are "somewhat skewed due to (Worcester’s) large student population."
In addition, Fitch said the city’s debt ratios are moderate and its future debt needs are manageable. And, while unfunded employee benefit obligations are large, "the city continues to manage these commitments and consistently funds required pension contributions," the agency wrote.
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