have convinced Wall Street to boost the city’s credit rating, easing its borrowing costs.
Rival Standard & Poor’s on April 20 said it was considering a similar Philadelphia upgrade, lifting the city to its equivalent AA rating, if the city continued its “conservative” tax and funding practices.The upgrades would put Philadelphia’s credit on a level with New York City’s, shaving an estimated $7 million off the total interest costs of its annual general-obligation bond borrowings, among other gains, according to a February analysis for City Council by Econsult Solutions Inc.
Investors accept lower interest on bonds they buy from high-rated cities and other borrowers, because those bond issuers are considered more likely to repay the money, plus the interest. The first ballot question facing voters in this month’s primary would make it easier to set aside cash when Philadelphia runs a surplus , with revenues ahead of spending, according to council member Katherine Gilmore Richardson, who”I was so pleased” to see the rating agencies’ positive reports, she said Thursday. . “Our rainy day fund will actually save the city money,” because a higher bond rating means lower interest rates.
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Source: Reuters - 🏆 2. / 97 Read more »