City maintains bond rating for new borrowing

The downtown Evanston skyline with the Northwestern University campus in the background. (Google Maps)

The bond agencies Fitch and Moody's both maintained the Evanston's existing debt rating for the $47.1 million in new debt the city plans to issue later this month to fund the new Robert Crown Center and other capital projects.

Fitch, which rates the city's debt AA+, said the rating, the second highest available, reflects the city's "strong independent revenue-raising ability, moderate long-term liability burden and solid financial flexibility."

It notes that the city has had an "uneven general fund operating performance since the last recession" as the city worked "to preserve services and increase annual pension funding while avoiding major tax increases."

It says "available reserves have declined, but remain relatively healthy."

Moody's, which rates the city's debt Aa2, said he rating, its second highest available, reflects the city's "strong economic profile characterized by a large tax base anchored by Northwestern University and an affluent residential profile."

But Moody's cautioned that three factors could lead to a future ratings downgrade -- reduced fund balances or liquidity, growth in the city's debt or pension burden and material tax base contraction or a weakened socioeconomic profile.

Fitch voiced concern about the city's elevated fixed costs for debt service and retiree benefits.


Update 7/12/18: By comparison, Moody's today rated City of Chicago debt Ba1, one level into junk territory.

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