Moody's Affirms New Bedford, MA's A1 Credit Rating

Strategic Insights -

Moody's Investors Service has confirmed the city's strong financial foundation and economic growth prospects, affirming its A1 issuer rating and A1 rating on the city's general obligation limited tax (GOLT) bonds. This decision reflects the city's stable tax base, improving economic growth rate, and rising equalized value per capita. Moody's maintains a stable outlook on the long-term underlying ratings, citing the city's conservative fiscal management and manageable long-term liabilities.

Key Takeaways:

  • Moody's has affirmed the City of New Bedford, MA's A1 issuer rating, reflecting its diverse economy and stable tax base.
  • The city's economic growth rate and resident income levels are below the national average but are showing signs of improvement, alongside a rising equalized value per capita.
  • The rating incorporates the city's stable financial position, reliance on state aid as a primary revenue source, and maintenance of moderate reserves.
  • The city ended fiscal 2024 with an available fund balance ratio of 16.4% and long-term liabilities and related fixed costs totaling 188.3% and 7.8% of revenues, respectively.
  • The stable outlook reflects Moody's expectation that the tax base will continue to grow and generate sufficient revenue to maintain conservative fiscal management.
  • New Bedford has a population of approximately 101,079 and provides general government services including police and fire protection, public education, and other essential services.

Statistics:

  • The city has approximately $335 million in general obligation debt outstanding.
  • The available fund balance ratio was 16.4% as of fiscal 2024.
  • Long-term liabilities and related fixed costs totaled 188.3% and 7.8% of revenues, respectively, as of fiscal 2024.
  • The city's economy is showing signs of improvement, with rising equalized value per capita.
  • Positive factors for a rating upgrade include an increase in the available fund balance ratio to around 25% and improvement in the underlying economy.

Sources:

  • Moody's Ratings, "New Bedford, MA", news release, Moody's Investors Service (no date provided).
  • US Cities and Counties, Moody's Investors Service methodology, published in July 2024 (https://ratings.moodys.com/rmc-documents/425429).