Moody’s upgrades Woonsocket bond rating

WOONSOCKET MAYOR LISA Baldelli-Hunt said Moody’s Investors Service Inc. has upgraded the rating of the city of Woonsocket’s outstanding general obligation bonds for the second time in two years. / COURTESY CITY OF WOONSOCKET
WOONSOCKET MAYOR LISA Baldelli-Hunt said Moody’s Investors Service Inc. has upgraded the rating of the city of Woonsocket’s outstanding general obligation bonds for the second time in two years. / COURTESY CITY OF WOONSOCKET

(Updated 2:07 p.m.)
WOONSOCKET – Moody’s Investors Service has upgraded the city of Woonsocket’s bond rating to Ba3, up from B2, which affects some $153 million in outstanding debt, according to the rating agency.

This was the second time Moody’s upgraded the rating of the city’s outstanding general obligation bonds in two years, Mayor Lisa Baldelli-Hunt said Thursday.

The Moody’s rating upgrade to ‘Ba3,’ with a stable outlook of the city’s debt, follows a multi-step upgrade by Fitch Ratings Inc. in June.

The Ba3 rating is a speculative grade, according to Moody’s website, but is just one rating level shy of investment grade.

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Moody’s said the city has taken a number of steps to improve its financial condition, including the implementation of stronger fiscal policies and management, conservative budgeting, improved levels of liquidity and a commitment to fully funding the annual required contribution for the public safety pension plan.

“The stable outlook reflects our expectation that the city will maintain structurally balanced operations,” Moody’s said in the report. “Liquidity has improved the past three years, and we expect the city will be able to meet its obligations without deferring expenses and without relying on any form of cash flow borrowing.”

Baldelli-Hunt said the latest bond rating upgrade is another example that the city is in the midst of a significant turnaround.

“A strong bond rating is an important statement to the business community that will positively affect future investment in the city of Woonsocket. This great news is the result of years of hard work by city residents and city employees who have invested their time and energy into our community,” Baldelli-Hunt said in a press release.

If the city continues to fund annual pension contributions and increases general and school fund reserves, it could lead to a future rating upgrade, Moody’s said.

Moody’s reviews the city’s credit rating on an annual basis. The last Moody’s ratings action for Woonsocket was an upgrade to ‘B2’ from ‘B3’ in 2015.

Staff writer Mary MacDonald contributed to this report.

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