HOUSTON – In a move that could save money for the City of Houston and its taxpayers, Moody’s Corp., the national credit rating service, has boosted the city’s bond rating to Aa3 “stable,” from Aa3 “negative outlook,” following voter approval of all five city bond propositions in the Nov. 7 election.
“The voters delivered the ultimate expression of faith in our efforts to restore Houston government to financial health,” Mayor Sylvester Turner said, “but a ratings boost from Moody’s is a powerful endorsement of our work.”
Voters in the Nov. 7 election gave overwhelming support to a $1 billion package that placed the final cornerstone in Mayor Turner’s hard-won pension reform package that will save taxpayers hundreds of millions of dollars annually and stabilize the pension funds for police, firefighters and other municipal employees. Police and municipal employees conceded $1.8 billion in benefits long-term in return for restoring greater reliability to the funds
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Voters also overwhelmingly approved $495 million in improvement bonds to fund replacement of aging first-responder vehicles, police and fire stations, library roofs, parks equipment and other essential facilities for public benefit.
For buyers of Houston’s bonds, the Moody’s ratings boost potentially raises their confidence level in the city’s ability to pay bond interest to them and potentially allows the city to lower the interest rates it offers to those investors. The difference could save the city significant amounts of money once it starts selling the bonds in December.
Moody’s said today that in addition to passage of the bonds, its improved rating “reflects the city’s large and regional economy that remained resilient despite the oil and gas industry slump,” “the city’s manageable debt profile,” and “a strong management team that has demonstrated commitment to improving the city’s fiscal outlook.”
The Moody’s Houston report is at https://www.moodys.com/researchandratings/research-type/issuer-research/ratings-news/003004005/003004005/-/-1/0/-/0/-/-/en/global/rr