Buffalo, N.Y. (WBEN) - Fitch Ratings, a top independent firm on Wall Street, has reaffirmed the City of Buffalo's bond rating of an "A+", and also the city's outlook rating of "Stable".
The reaffirmation ratings confirm the city's longstanding commitment to being fiscally responsible during the toughest economic times, while recognizing Mayor Byron Brown's fiscal management as leading to a stable financial outlook for the city.
Bond ratings are a key factor in determining the interest rate the city pays on its annual capital borrowing.
"The reaffirmation of the City of Buffalo's bond rating and outlook is good news," said Mayor Brown in a statement on Friday. "As part of my ongoing commitment to the City's fiscal health, I want to thank every member of the city finance and budget teams, who worked hard to make this happen. Higher/Steady bond ratings mean lower interest costs when Buffalo borrows money, a savings for taxpayers. This reaffirmed bond rating reinforces that we're moving in the right direction in Buffalo."
In announcing the reaffirmation of the City's bond rating and outlook, Fitch Ratings cited the city's solid financial resilience, supported by "high midrange" budgetary flexibility and an expectation that unrestricted general fund reserves (sum of Committed, Assigned and Unassigned) will be maintained at least equal to or above 10% of spending. The city has been able to maintain an unrestricted reserve balance of over 10% of general fund spending since Fiscal Year 2018.
Fitch Ratings noted that factors that could lead to a positive rating upgrade improve median household income, unemployment and sustain 10%-20% reduction in long term liabilities such as debt, pension and OPEB (Other Post Employment Benefits).
The three primary bond rating agencies in the U.S. are Moody's Ratings, Standard & Poor's and Fitch Ratings.
The City of Buffalo Bond Rating and Outlook for Fiscal Year 2024 from the rating agencies are as follow:
- Bond Ratings Moody Ratings: A1
- Standard & Poor's: A+
- Fitch Ratings: A+
- Outlook Moody Ratings: Stable
- Standard & Poor's: Stable
- Fitch Ratings: Stable
The City of Buffalo's bond ratings have improved significantly when compared to the Moody ratings of Baa3 and S&P ratings of BBB- back in 2006.
