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The original item was published from 5/18/2021 5:01:50 PM to 7/31/2021 12:00:01 AM.

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Town of Normal News

Posted on: February 15, 2021

[ARCHIVED] Town of Normal identified as top tier municipality by multiple credit rating agencies

Moody’s Investor Services and Fitch Ratings, Inc., two top credit rating agencies, gave the Town of Normal high marks on general obligation bonds. 

 The ratings for the Town of Normal are positive and stable. Moody’s assigned a credit rating of Aa1 to the Town of Normal’s $2 million General Obligation (GO) Refunding Bonds, Series 2021, and reaffirmed this rating for all the Town’s GO debt. 

 Fitch Ratings, Inc. assigned an AAA rating to the $2 million series 2021 unlimited tax general obligation bond (ULTGO) and also reaffirmed its AAA rating for all the Town’s GO debt. Fitch had most recently reviewed these ratings in December 2020 as part of their regular internal review. The current review was a much deeper dive into Town’s fiscal position as part of the official rating assigned to the current $2 million refunding bond issue. 

 “The Town of Normal is proud to receive high ratings and stable outlooks from these agencies.” said Director of Finance Andrew Huhn. “We are dedicated to protecting the Town’s financial future. The Council and leadership team’s conservative budget practices help maintain a strong and consistent financial outlook for the Town.”

 Huhn indicated only about 10% of municipalities are recognized with this level of confidence. 

 About Moody’s

The Aa1 credit rating is Moody’s second highest rating, with Aa indicating a high-quality rating and very low credit risk; the 1 indicates a higher-end obligation on Moody’s global long-term rating scale. 

 Moody’s indicates the following as considerations for the rating:

  • Normal's moderately sized tax base with above-average resident incomes, 
  • the stabilizing presence of Illinois State University (Baa2 stable), 
  • the town's very healthy financial profile characterized by strong and stable reserve levels and revenue-raising flexibility as a home rule unit of local government, and
  • the town's above-average long-term leverage from debt and pensions when compared to full valuation that becomes more moderate relative to operating revenue.

 The Town has about $81 million in rated debt outstanding, following the sale of this general obligation tax (GOULT) debt. The Town last received a rating from Moody’s in 2018. 

 About Fitch

The AAA rating from Fitch is their highest rating. The Town’s AAA stable rating is based on:

  • ample reserves and superior budgetary flexibility;
  • existing financial flexibility from conservative budgeting, strong reserves and policies, solid expenditure cutting; and 
  • the active role the Town takes in economic development. 

 Moody’s Investor Services and Fitch Ratings Inc. are two of three nationally recognized statistical rating organizations designated by the U.S. Securities and Exchange Commission in 1975. The third is Standard & Poor’s. 

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