NEW ORLEANS – Standard and Poor’s (S&P) Rating Services today upgraded its long-term and underlying rating from ‘A-’ to ‘A+’ on the City of New Orleans’ general-obligation debt and issued a positive outlook for all ratings.
This is the third S&P rating upgrade for the City of New Orleans since Mitch Landrieu became mayor in 2010 – the first upgrade occurred in 2013 to ‘BBB+’ from ‘BBB,’ the second occurred earlier this year from ‘BBB+’ to ‘A-‘ – and the new rating far exceeds the City’s general-obligation credit rating that it had prior to Hurricane Katrina. The rating upgrade will allow the City to obtain lower interest rates and save residents money.
“This is a major milestone for the City of New Orleans and continued validation of the progress we have made in reviving the City’s finances,” said Mayor Mitch Landrieu. “When we took office nearly six years ago, our administration faced a huge $97 million budget hole, but we pulled the City back from a fiscal cliff by shrinking government and delivering better services.”
The Board of Liquidation, City Debt, manages the City of New Orleans general-obligation (GO) debt and requested the rating review from S&P as part of a refinancing of approximately $71 million in existing GO debt. The refinancing will lead to lower overall interest rates and save city taxpayers in terms of lower debt service in future years.
S&P issued its credit upgrade based on the City’s recent and projected improvement in both budgetary performance and its fund balance.
The news of the ratings upgrade comes weeks after the City announced a landmark settlement with the New Orleans firefighters union and pension board on a lawsuit settlement and major pension reforms that will save taxpayers hundreds of millions of dollars.
"Today's news that the S&P has upgraded the City's credit rating for the second time this year is evidence of this Administration and Council's commitment to fiscal prudence and resolving the longstanding liabilities related to our Fire Department,” said City Councilmember-at-Large Stacy Head. “We remain focused on the need to increase our tax base to spread the tax burden more equitably, which should continue to benefit not only our ratings but taxpayers directly."
"Mayor Landrieu, CAO Andy Kopplin, and their entire team have done a truly excellent job tackling and solving many of our biggest budgetary challenges,” said District A City Councilmember Susan Guidry. This announcement is yet another indication that the financial sector is taking notice, and we are all the beneficiaries of their hard work. I have been proud to support the Administration's efforts to bring financial stability to our city, and I look forward to continuing that work both in the 2016 budget season and in the months and years to come."
“Congratulations to the whole team who have worked hard to achieve this milestone, said District B City Councilmember Latoya Cantrell. “This excellent rating will enhance financing prospects for New Orleans.”
“The City Council and Administration have worked diligently to restore New Orleans' credit rating,” said District C Councilmember Nadine Ramsey. “S&P's rating increase from A- to A+ is the culmination of legislation & policies that strengthened the city's economic stability. The future looks bright for New Orleans and her citizens.”
"This is good news for New Orleans,” said District D Councilmember Jared Brossett. “It shows that we are being financially responsible while at the same time experiencing economic growth. Now, as we continue down this path of responsibility and growth we must make sure that the success of the local economy lies not only in numbers and indicators, but in real opportunity that touches the entire city."
"Since we took office five years ago, Mayor Landrieu has directed us to confront New Orleans's fiscal challenges head on and with eyes wide open." said First Deputy Mayor and Chief Administrative Officer Andy Kopplin. “We reversed the practice of using one time money for recurring expenses, built back our reserves, and addressed looming liabilities. I want to thank the Mayor for his continued leadership and all the dedicated public servants at City Hall who helped us implement these challenging but essential policies. I am confident that we will continue to make reforms in our government that improve efficiency further and garner even higher credit ratings in the future.”
S&P Upgrades City's Credit Ratings Two Levels To A+
