Woodbury’s credit rating upgraded to AAA

The bond rating service of Standard & Poor’s has upgraded the City of Woodbury’s general obligation credit rating to AAA, the highest available rating.

The credit rating report cited the city’s large and affluent tax base; solid financial operations with healthy reserve levels; and moderate overall debt burden.

“The city’s financial position is solid, in our opinion, as represented by the maintenance of very strong reserve levels,” the ratings report noted. “The city’s participation in the deep and diverse Twin Cities metropolitan area economy lends stability to the rating.”

“The upgraded credit rating is good news for the city and local taxpayers,” said finance director Tim Johnson. “The upgrade helped reduce the interest rate and, therefore, the total cost on debt from prior projects that was recently refinanced.”

For example, Johnson had estimated the interest rate on the $5.5 million in bonds at 2.89 percent. Improving bond market conditions, coupled with the city’s upgraded credit rating, resulted in a lower interest rate of 2.59 percent. The city will achieve interest savings of more than $600,000 since the old interest rate was 5.74 percent.

The improved credit rating also will reduce the cost on future debt issued for public projects such as the neighborhood street and utility projects. The city’s previous credit rating was Aa1, issued by Moody’s Investors Services in November 2006.

Woodbury is one of just 12 cities in Minnesota that have an AAA bond rating.

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