Methuen’s bond rating from Moody’s Investor Service is climbing for the fourth time since the beginning of 2020, allowing the city to borrow money at more attractive rates.
Methuen’s general obligation bond rating from Moody’s increased to A1 from A3, described by Mayor Neil Perry and Chief Administrative and Financial Officer Maggie Duprey as a “double increase that bypasses one full rating step.” Back in May, Standard and Poor’s also upgraded Methuen’s general obligation bond rating to “AA- with a stable outlook.”
“Certainly, sound financial management is a team effort,” Perry said. “But without the planning and leadership provided by CAFO Duprey for improved control and planning, these partners, from the mayor to department heads to city councilors, could not have taken the necessary steps to do so.”
Moody’s summary report notes “The upgrade to A1 reflects the material improvement in the city’s reserve and liquidity positions following successive operating surpluses that are projected to continue in fiscal 2022. Following a period of financial imbalance and reserve depletion, new management has effectively implemented improvements to the city’s budgeting process and expenditure control making governance a driver of this upgrade.”
Perry added, the improved cash position also puts Methuen in a position of being able to pay for some initiatives without increased borrowing. “Given that a balance must be struck between borrowing and spending if we wish to maintain this superior rating, we now have the enviable task of deciding how much we can pay out of pocket for some of our projects,” he said.