Moody's Investors Service – one of the leading global integrated risk assessment and bond rating firms – has upgraded the City of Moorhead’s bond issuer rating to Aa2 from Aa3. Moody's also upgraded the rating on Moorhead’s (MPS) public utility revenue bonds to Aa2 from Aa3.
Many government entities and other large organizations issue bonds to finance all or part of projects such as infrastructure and construction. The upgrading in the City of Moorhead’s bond rating means savings to taxpayers and a safer investment for bond buyers interested in Moorhead.
The City of Moorhead will use $16 million in new bonds to finance 2023 infrastructure improvement projects. The estimated interest cost savings on the new bonds attributed to the rating upgrade is more than $180,000 on this bond issuance alone.
Moody’s stated that the City’s rating was upgraded to Aa2 because of “a very strong financial position, a growing local economy that serves as a regional economic hub and moderate long-term liabilities and fixed costs.” The combined utility revenue debt was upgraded to Aa2 because the system has a strengthened liquidity position, low debt ratio and solid debt service coverage, which is supported by strong local rate-setting authority.
“I am proud of our City team and what this bond rating upgrade means for taxpayers and ratepayers. Moorhead elected officials and staff work hard to ensure entrusted public funds are managed well,” said City Manager Dan Mahli. “At a time when even the US federal government’s bond rating is downgraded, it is wonderful to see strong financial management recognized in the City of Moorhead.”
The Moorhead City Council will authorize the sale of bonds at its meeting of September 11, 2023.
