NASHUA – Standard & Poor’s (S&P) Financial Services reaffirmed the City of Nashua’s AAA bond rating as its highest rating possible, citing the city’s strong budgetary performance, strong city management and a strong economy.
This rating was used for the city to issue bonds sold on Oct. 20 in the amount of $17,675,000 with an interest rate of 1.632%. Bond proceeds will be used to finance various capital improvement projects and refund a portion of the city’s August 1, 2010 bond issue and generate total savings of $211,510 over the remaining life of the refunded bonds. Projects funded with this bond are the middle school project, health department, landfill, sewer and the city’s five-year paving plan.
“A strong bond rating reflects the City of Nashua’s sound financial management practices and the overall good health of our economy. It allows the city to sell bonds and borrow at reduced rates, which will positively affect all Nashua taxpayers,” said Mayor Donchess.
Nashua has maintained its AAA rating with Standard and Poor’s since 2017.
“Nashua is one of only a few communities in the state that holds two AAA ratings both from S&P and Fitch,” said City Treasurer David Fredette.
Nashua mayor Jim Donchess.
S&P’s credit overview of Nashua showed the following impressive results:
• Very strong economy, with access to a broad and diverse metropolitan statistical area (MSA);
• Very strong management, with strong financial policies and practices under our Financial Management Assessment (FMA) methodology;
• Adequate budgetary performance, with operating surpluses in the general fund and at the total governmental fund level in fiscal 2019;
• Very strong budgetary flexibility, with an available fund balance in fiscal 2019 of 22% of operating expenditures;
• Very strong liquidity, with total government available cash at 49.3% of total governmental fund expenditures and 6.2x governmental debt service, and access to external liquidity we consider strong;
• Very strong debt and contingent liability position, with debt service carrying charges at 7.9% of expenditures and net direct debt that is 20.3% of total governmental fund revenue, as well as low overall net debt at less than 3% of market value, but a large pension and other postemployment benefit (OPEB) obligation; and
• Very strong institutional framework score.