City and County of Denver, CO

10/09/2024 | Press release | Distributed by Public on 10/09/2024 15:29

Denver Recognized for Strong Financial Management, Economy

Denver Recognized for Strong Financial Management, Economy

Published on October 09, 2024

Dedicated Tax Bonds rating receives upgrade, and highest achievable credit rating on General Obligation Bonds is affirmed

Denver - Credit rating agency Moody's has upgraded Denver's dedicated tax bonds rating and has reaffirmed Denver's Aaa General Obligation Bonds rating, the highest credit rating possible. The ratings actions are largely attributable to Denver's large and diverse economy that has continued to grow, the city's strong governance and well managed financial operations, and new methodology from Moody's for all U.S. cities and counties.

The upgrade impacts $815.1 million in outstanding dedicated tax debt.

Earlier this year, the U.S.'s two other primary bond ratings agencies also reaffirmed the City and County of Denver's AAA/Aaa/AAA General Obligation (GO) bond rating with a stable outlook, the highest achievable bond rating for government and corporate bond issuers.

"Denver is pleased our credit ratings continue to benefit taxpayers, through lower and more favorable interest rates," Denver's Chief Financial Officer Nicole Doheny said. "Our dedicated Department of Finance team works hard to ensure we carefully manage the city's finances. I'm proud that Moody's agrees that we continue to operate with a very solid, stable foundation."

Bond ratings indicate the city's credit quality and are used to inform investors of the likelihood the city will repay its debt on time and in full. Bond ratings also impact the interest rates government issuers pay on their bonds.

Moody's provided the following additional reasons for Denver's high ratings:

  • The city's dedicated tax revenue experienced significant volatility in the pandemic but has grown favorably at an average of roughly 8% annually over the past 10 years through fiscal year-end 2023, with slower, but still positive growth expected for fiscal 2024 and 2025.
  • Denver's dedicated tax bonds benefit from sales tax collections providing strong coverage of over 3.6 times the maximum annual debt service.
  • Denver plans to conservatively budget and manage all revenue streams in the wake of the changing consumer spending and real estate market.
  • And while housing affordability has weakened for the Denver area given the high demand and surge in values over the pandemic, recent softening of home prices as well as ongoing growth in income levels generated by the area's highly skilled labor pool should help the economy continue to perform well in comparison to the nation.

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About the Denver Department of Finance

Committed to being the best financially managed city and county in the nation, the Department of Finance (DOF) unifies the financial and accounting functions of the City and County of Denver and provides residents easy access to key financial data through Transparent Denver. DOF is divided into the Office of the CFO and seven divisions, including the Assessor's Office, Controller's Office, Budget and Management Office, Capital Planning and Real Estate, Cash and Capital Funding, Risk Management and Worker's Compensation, and Treasury. For more information, visit Denvergov.org/finance.