Fitch Ratings today announced it has assigned its top-level “AAA” rating to new general obligation bonds Evanstion is scheduled to issue this year and is maintaining its “AAA” rating on the city’s $151.5 million in bonds already outstanding.

Fitch Ratings today announced it has assigned its top-level “AAA” rating to new general obligation bonds Evanstion is scheduled to issue this year and is maintaining its “AAA” rating on the city’s $151.5 million in bonds already outstanding.

A Fitch news release said the rating outlook for the city is “stable” and that a key driver for the continued high rating was “the city’s ability to restore financial equilibrium while adequately addressing its severely under-funded pension system especially given the general malaise of the current economic climate.”

As positives for the city’s ability to pay its bills, the firm noted that:

  • Residents display a superior socioeconomic profile reflecting high wealth, employment and education levels.
  • Evanston’s advantageous location provides abundant employment opportunities both within the city and throughout the Chicago metropolitan region although cyclical economic pressure is currently evident.
  • Despite generating operating deficits after transfers for three consecutive years, the city still maintains sound reserves and furthermore, management has taken meaningful steps to restore long-term structure balance.

It also praised the city’s efforts to reduce spending during the recession through layoffs and unpaid holidays.

Moody’s Investors Service downgraded the city’s debt by one notch, to its “Aa1” rating, over two-and-a-half years ago. There’s no word so far of any change in Moody’s assessment of the city’s creditworthiness. 

Related link

Fitch news release

Bill Smith is the editor and publisher of Evanston Now.

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2 Comments

  1. I don’t know why

    With a pension deficit of $69 million, just what is Fitch smoking?  They must be in bed with the bond underwriters. 

  2. Vaule of Bond Raters

    Remember Fitch [not as much as S&P and Moody] rated the bonds [behind the CDOs] that failed for Lehman, package Goldman sold for Paulson and many others, as AAA even though we now know and many knew then that they were ‘junk bonds’ that no one should buy.

    Congress is looking at telling investors/firms not to rely on ratings and even recently [Moody?] told investors not to reference the rating they gave when they sold the bonds.

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