City's Bond Rating Affirmed at AA+

The City of Melrose's bond rating agency, Standard & Poor’s (S&P), has once again affirmed Melrose’s AA+ bond rating with a stable outlook, meaning they do not expect the rating to change in the next two years. AA+ is the second highest bond rating available to a municipality (AAA being the highest). Melrose’s bond rating was last affirmed at AA+ by S&P in 2020.

According to the credit report released today by the City of Melrose, S&P’s rating reflects the City’s good financial management policies and practices and strong budgetary performance. The stable outlook reflects their view that the City’s continued conservative budgeting will “support balanced operations, supported by very strong economy and reserves.” Although the AA+ rating remained unchanged from 2020, Melrose scored the highest ratings in several categories, achieving “Very Strong” ratings in budgetary flexibility and liquidity.

“Especially in light of the borrowing that we may be looking at for the Public Safety Buildings, this is incredibly good news for Melrose,” noted Mayor Paul Brodeur. “Even with the financial volatility at the state and federal levels, to come out with a better report than we had even three years ago is a testament to the City’s strong management practices and philosophy which are propelling us towards achieving a AAA rating.”

“This new rating brings Melrose even closer to achieving AAA status,” noted CFO Patrick Dello Russo. “This is best indicator of the financial health of the City, and it is my expectation that the City will be upgraded to AAA the next time we are rated, provided the City maintains its current fiscal disciplines and conservative budget practices.”

Generally, a municipality is rated every two or three years depending on the frequency with which the city or town issues debt. Through the bond rating process, the rating agency is given the opportunity to review all the City’s financial audits, as well as information about financial practices and policies, in order to provide a complete and thorough evaluation of the City’s credit worthiness.

The bond rating can be viewed as a type of “report card” on the City’s fiscal health and management practices. A rating of AA+ provides assurance to investment companies that the City will meet its obligations on these notes, and therefore results in the City’s receiving the lowest interest rates provided by law when debt is issued.