LUBBOCK, Texas (NEWS RELEASE) — The following is a news release from the City of Lubbock:
The City of Lubbock has maintained its AA+ bond rating with a stable outlook. This is the second highest quality bond rating a municipality can receive and represents a high credit worthiness with low risk of default. The City of Lubbock’s Water and Wastewater System maintained its AA- bond rating reflecting the system’s very strong enterprise and financial risk profiles. Fitch assigned an upgraded positive outlook and S&P kept the system’s outlook at stable.
The rating reflects the opinions of both S&P Global Ratings and Fitch Ratings agencies. Each agency uses independent methodology to evaluate a municipality’s credit worthiness. S&P noted the city “has a history of maintaining a very strong financial position that is supported by strong financial management practices and a growing, diversified economic base.” While Fitch said “the bond rating reflects the city’s high level of demonstrated and anticipated operating financial resilience through the current economic downturn.”
“Recently, both S&P and Fitch Ratings put all public finance sectors on negative outlook with many municipalities facing downgrades to their credit ratings,” said City of Lubbock Chief Financial Officer Blu Kostelich. “To have both of these independent agencies affirm our ratings without putting the City on negative outlook speaks highly to the financial position of the City of Lubbock. The changes implemented by this organization over the last few years will continue to benefit our residents and businesses.”
Though both organizations mention the current economic overview in regards to the impact of Coronavirus, Fitch states the city’s “underlying economic fundamentals, moderate diversity in Lubbock’s economy, and a steadily growing population base will support the city in its recovery from the current economic downturn.” S&P attributes Lubbock’s continued economic growth to city management that is “strong, with strong financial policies and practices under FMA (Financial Management Assessment) methodology, indicating financial practices are strong, well embedded and likely sustainable.”
“The City is in its third year since making strategic changes to bring about greater fiscal responsibility and an improved financial position,” said Lubbock City Manager Jarrett Atkinson. “The rating actions by S&P and Fitch reaffirm that we are on the right path and need to stay the course.”
(News release from the City of Lubbock)