Austin has become the only major Texas city to hold the highest possible credit rating from all three leading rating agencies, a distinction that could help the city secure lower borrowing costs as it prepares to finance several major infrastructure projects.<\/p>\n
Moody\u2019s Ratings upgraded Austin\u2019s overall credit rating and general obligation debt rating from Aa1 to Aaa, according to a memo sent Friday<\/a> to the mayor and City Council. Austin already held top AAA ratings from S&P Global Ratings and Fitch Ratings.<\/p>\n Credit ratings measure a borrower\u2019s ability to repay its debts. Stronger ratings generally reduce risk for investors and can allow governments to borrow money at lower interest rates.<\/p>\n Moody\u2019s raised Austin\u2019s issuer rating<\/a> from Aa1, its second-highest grade, to Aaa. The upgrade means Austin now holds the highest possible rating from Moody\u2019s, S&P Global Ratings and Fitch Ratings.\u00a0<\/p>\n The agency also upgraded Austin\u2019s general obligation debt from Aa1 to Aaa, along with other upgrades to ratings on debt supported by hotel occupancy taxes, the city\u2019s water and wastewater system and annual city appropriations.<\/p>\n Austin\u2019s general obligation debt ratings, which are indicative of overall credit ratings, exceed those of Texas\u2019 other largest cities.<\/p>\n Moody\u2019s upgraded Dallas\u2019 general obligation credit rating last month<\/a> but it\u2019s still A1 \u2013 the fifth-highest ranking. It has an AA- rating<\/a> from S&Pas of last year and an AA rating<\/a> from Fitch as of 2024.<\/p>\n The agency cited Austin\u2019s large and diverse economy, anchored by state government and the University of Texas, as well as the region\u2019s continued technology-sector growth.<\/p>\n Moody\u2019s also credited the city with taking steps to reduce long-term pension and retiree health care liabilities.<\/p>\n Those changes included increasing contributions toward older pension obligations, trying contributions to actuarial calculations, creating lower benefit tiers for newer employees and requiring eligible retirees to enroll in Medicare Advantage plans at age 65.\u00a0<\/p>\n Moody\u2019s also cited rising city revenue and what it described as \u201cprudent financial management.\u201d\u00a0<\/p>\n Austin expects to assume substantial additional debt as it expands Austin-Bergstrom International Airport, redevelops the Austin Convention Center and upgrades water and wastewater infrastructure. Moody\u2019s noted, however, that each project has a dedicated revenue source to repay the debt.<\/p>\n The agency assigned Austin a stable outlook, indicating that it does not expect to change the rating in the near term. Moody\u2019s said continued economic growth and utility rate increases should generate enough revenue for the city to maintain its financial position as its debt grows.<\/p>\n","protected":false},"excerpt":{"rendered":"Austin has become the only major Texas city to hold the highest possible credit rating from all three…\n","protected":false},"author":2,"featured_media":383310,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[132,134,133,8002],"class_list":["post-383309","post","type-post","status-publish","format-standard","has-post-thumbnail","category-austin","tag-austin","tag-austin-headlines","tag-austin-news","tag-policy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/383309","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/comments?post=383309"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/383309\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media\/383310"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media?parent=383309"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/categories?post=383309"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/tags?post=383309"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}