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City of Del Rio Standard & Poor’s Creditworthiness and Credit Quality Increase
Rating organizations such as the Fitch Group and Standard & Poor’s help investors make soundfinancial decisions and help policyholders evaluate financial stability of an organization.
S&P Global Ratings raised its long-term rating on Del Rio, Texas general obligation (GO) bondsand combination tax and surplus revenue certificates of obligation from ‘A+’ to ‘AA-‘. At thesame time, S&P Global Ratings assigned its ‘AA-‘ long-term rating to the city’s series 2018combination tax and revenue certificates of obligation. The outlook is stable.
The rating reflects S&P’s opinion of Del Rio:• Weak economy, with market value per capita of $38,214 and projected per capitaeffective buying income at 69.0%, but that is benefitting from a local stabilizinginstitutional influence;• Strong management, with “good” financial policies and practices under our FinancialManagement Assessment (FMA) methodology;• Strong budgetary performance, with operating surpluses in the general fund and at thetotal governmental fund level in fiscal 2016;• Very strong budgetary flexibility, with an available fund balance in fiscal 2016 of 55% ofoperating expenditures;• Very strong liquidity, with total government available cash at 121.0% of totalgovernmental fund expenditures and 8.0x governmental debt service, and access toexternal liquidity we consider strong;• Weak debt and contingent liability profile, with debt service carrying charges at 15.1% ofexpenditures and net direct debt that is 167.9% of total governmental fund revenue, butrapid amortization, with 69.9% of debt scheduled to be retired in 10 years; and• Strong institutional framework score.
The Fitch Group, also upgraded the City of Del Rio as a ‘AA-‘ high grade investment. Since S&Pand Fitch have both upgraded the City of Del Rio to ‘AA-‘, the city is now at a higher tier which isreferred to as the “High grade” tier.
The City of Del Rio is proud to say that this is the highest investment grade that the city has everobtained.