S&P lifts Providence’s credit outlook from ‘stable’ to ‘positive’

CITING MAYOR ANGEL TAVERAS' actions to improve the city's fiscal management practices, Standard & Poor's Ratings Services on Friday upgraded Providence's credit outlook from
CITING MAYOR ANGEL TAVERAS' actions to improve the city's fiscal management practices, Standard & Poor's Ratings Services on Friday upgraded Providence's credit outlook from "stable" to "positive." / PBN FILE PHTO/FRANK MULLIN

PROVIDENCE – Standard & Poor’s Ratings Services has upgraded Providence’s “BBB” credit rating outlook from “stable” to “positive” to reflect Mayor Angel Taveras’ efforts to improve the city’s fiscal management practices and general fund balance, Taveras’ administration announced Friday.

When Taveras took office in January 2011, Providence’s S&P credit rating was “A outlook negative,” and it fell as low as “BBB outlook negative” in June 2012 in the throes of the city’s fiscal emergency.

In raising Providence’s credit outlook to “BBB outlook positive,” S&P cited Taveras’ actions in 2011, which included renegotiating employee contracts, cutting discretionary spending and raising property taxes in the face of a looming $70 million structural deficit.

The city’s “recently strong budgetary performance and improving general fund balance” as well as its strong liquidity to cover debt service and expenditures were among the reasons for S&P’s decision to upgrade its credit outlook. However, S&P warned that Providence’s continued lack of budgetary flexibility remains a cause for concern.

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“Providence is on the way back,” Taveras said in a statement. “S&P’s positive outlook on our city’s general obligation debt is evidence that we have made significant progress in our efforts to restore long-term fiscal stability.”

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