City’s bond rating upgraded to A+

The city recently earned an upgrade in its municipal bond rating. Credit rating agency Standard and Poor’s increased the city’s long-term bond rating to A+ from A, according to city officials. The agency cited Salem’s stable employment and good household income levels, its improved financial management procedures and budget policies, and relatively low debt as positive credit factors. City officials said they welcome the upgrade because it offers Salem an opportunity to save on interest costs, and because it is a sign that the city’s finances are improving despite difficult economic times. The city, meanwhile, has been able to use an even higher Standard and Poors bond rating — AA — for a recent bond sale by taking advantage of the state’s “qualified bond” program. Under the program, municipalities that receive approval can use a bond rating just below the state’s rating when borrowing for specified projects. The Massachusetts Municipal Finance Oversight Board in July approved Salem’s application to issue $62.02 million in long-term qualified bonds to fund two school projects and other capital improvements. The city recently received competitive bids for $18.2 million of those long-term state qualified bonds. Robert W. Baird & Co. Inc. submitted the winning bid on the bonds, with an average interest rate of 3.159 percent, according to Jason Silva, chief of staff to Mayor Kimberley L. Driscoll.

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