Credit rating agency Fitch recently upgraded the City of Wilmington’s general obligations bonds rating from AA+ to AAA, joining Standard & Poor’s in giving the city the highest possible rating.
“The rating upgrade reflects the city’s continued strong financial profile including revenue and spending flexibility and ample reserve levels,” stated a news release from Fitch about the new rating. “The city serves as the economic hub for southeastern North Carolina. Business enterprises are diverse, while a large government and healthcare presence enhances stability.”
The agency also noted that despite the area’s above average population growth, “debt ratios are moderately low.”
The upgrade will help the city save millions of dollars through lower interest rates and other things.
“The better bond rating allows us to refinance on better terms,” said city spokesman Dylan Lee. “It puts us in a better negotiating stance and allows us more flexibility on new bonds or loans.”
Those savings could be seen immediately, as the city recently did some refinancing. At Tuesday’s Wilmington City Council meeting, a public hearing was held on the issuance of a general obligation public improvement bond of $2,925,000 to help cover the cost of improvements currently being done along the city’s Riverwalk. Since action on the bond was taken after the new credit rating from Fitch was released on April 1, Lee said it would see savings.
“Any bond we have from here on out will benefit from the better rating,” Lee said.
According to a release from the city, the upcoming refinancing of some bonds (which by their estimates would save about $5.9 million) as well as the sale of others to fund large construction projects (such as the $24 million Wilmington Police Department headquarters) helped lead to the upgrade.
The city maintained their AA+ rating with the other major credit agency, Moody’s.