The City of Hermistons general obligation credit rating recently saw an increase, meaning investors can be more confident in the citys ability to repay debt obligations.
Standard and Poor recently raised the citys long-term rating of its general obligation debt from an A+ to AA-. The category of AA is the second highest rating assigned by S&P, with the highest being an AAA and the lowest a D.
According to a press release from the City of Hermiston, S&P revised its previous assessment of Hermisons management condition from good to strong based on the recent adoption of formal debt management, financial reserves, investment management and long-term financial planning policies. The company also indicated the city has very strong budgetary flexibility, very strong liquidity and strong debt and contingent liabilities.
According to the press release, general obligation debt is used when cities issue general obligation bonds with the belief that a municipality will be able to repay its debt obligation through tax revenue.
Having a higher credit rating for G.O. bonds gives investors more confidence in purchasing the City of Hermistons bonds, the press release stated.
The rating expresses the S&Ps opinion on the ability and willingness of the agency issuing the bonds, such as a corporation, or a state or city government, to meet its financial obligations in full and on time, according to the press release.
S&Ps summary of Hermistons rating can be found on the City of Hermiston website at www.hermiston.or.us.