Bond agencies affirm Lexington’s AA bond rating

City scheduled to issue bonds next week

LEXINGTON, Ky. (WTVQ) – Once again, the nation’s two bond rating agencies, Standard & Poor’s Global Ratings and Moody’s Investors Service, have affirmed Lexington’s AA bond rating with a stable outlook.

“This bond rating reflects strong fiscal management and a resilient economy,” Mayor Linda Gorton said. “We are in a pandemic that is in its third year, and even so, our economy is healthy and growing. Our unemployment rate is down to near record lows. New businesses are moving here and local businesses are expanding.”

In reaffirming a stable outlook, Moody’s noted Lexington’s “large, growing tax base” and the presence of the University of Kentucky, that provides “stability.”

Standard & Poor’s cited expansions of some of the City’s largest employers and rebounding budgetary performance.

The announcements mean that Lexington will be able to continue to borrow money at a low rate. The City is planning to borrow $31.6 million to fund various projects that were approved in the current budget. A downgrade in the city’s bond rating would have meant higher interest rates. Those bonds tentatively are scheduled for Feb. 17.

Going forward, the rating agencies emphasized the importance of reestablishing cash reserves, closely managing debt issuance, and managing the pension increases.

“As we continue to manage our finances carefully and conservatively, the future looks bright,” Gorton said.

The ratings levels include:

• AAA. Highest credit quality. AAA’ ratings denote the lowest expectation of default risk.
• AA. Very high credit quality.
• A. High credit quality.
• BBB. Good credit quality.
• BB. Speculative.
• B. Highly speculative.
• CCC. Substantial credit risk.
• CC. Very high levels of credit risk.