Moody’s Investors Service on Tuesday affirmed its high issuer rating for the City of San Diego, reflecting confidence in the city’s financial health.
Moody’s gave the city an Aa2 issuer rating, the third-highest rating, and an A1 lease revenue rating, two spots further down. Moody’s noted the city had a strong and improving financial position, a low debt burden and a manageable pension burden.
“The city’s formal decision to establish a Pension Payment Stabilization Reserve sets it apart from its peers,” Moody’s analysts wrote.
The rating firm noted that San Diego had strong fiscal management, but potential risks included the city’s exposure to economically sensitive revenue sources and the fact that a large part of the budget was attributable to fixed costs.
Fitch Ratings, one of the other main bond ratings agencies, gave an A+ rating to the San Diego Public Facilities Financing Authority’s $105 million ballpark refunding bond issuance on Feb. 8. An A+ rating from Fitch is equivalent to an A1 from Moody’s. Fitch noted the city had “solid financial results” and a commitment to conservative fiscal policies.
The higher the ratings, the lower the interest paid on bonds.