City of Baton Rouge, LA
10/04/2024 | Press release | Distributed by Public on 10/04/2024 13:02
Baton Rouge Secures Strong Bond Ratings for MOVEBR and City-Parish Projects
Baton Rouge, LA -October 4, 2024 - East Baton Rouge Mayor-President Sharon Weston Broome is pleased to announce a series of significant achievements in bond ratings for the City-Parish's MOVEBR infrastructure program and other key financial instruments. These positive results underscore the strength of the City-Parish's credit profile and its continued commitment to fiscal responsibility.
On September 19, 2024, Moody's upgraded the MOVEBR credit from Aa3 to Aa2, citing strong debt service coverage at twice the required level and the stability of the underlying sales tax. Additionally, Standard & Poor's (S&P) affirmed its AA+ rating for the MOVEBR bonds. These ratings reflect the solid financial footing of the MOVEBR program, which continues to fund critical infrastructure improvements across East Baton Rouge Parish.
"We are thrilled with the upgrade from Moody's and the affirmation from S&P. These ratings validate the hard work of our finance team and the strength of our MOVEBR program," said Mayor-President Broome. "These ratings also ensure we can continue to invest in the critical infrastructure that drives our City-Parish forward."
In a separate process, Fitch Ratings, one of the three major national rating agencies, completed its review of East Baton Rouge Parish's general fund and sales tax credits. After placing several credits on the Under Credit Observation list for potential downgrades earlier this year, Fitch upgraded the 2019 MOVEBR sales tax bonds from AA to AA+, upgraded two other bonds to AA+, and affirmed all other ratings. This marks the second time in two years that the City-Parish successfully defended its strong financial position during rating reviews that had potential negative outcomes.
"These upgrades are a testament to our strong fiscal management and our ability to protect our community's financial interests," said Mayor Broome. "Our administration has gone before the rating agencies for credit observations twice, and twice we have emerged stronger."
The State Bond Commission unanimously approved the issuance of the next series of MOVEBR bonds September 26 with the sale anticipated on October 8, 2024.
Additionally, S&P confirmed in an earlier release that the ongoing creation of the City of St. George has no impact on the security or rating of the MOVEBR bonds.
The announcement comes on the heels of a successful pricing for the East Baton Rouge Sewer Commission (EBROSCO) bond refunding on September 5, which saw over $800 million in orders for $150 million in bonds. The strong demand allowed the City-Parish to lower interest rates, reduce the outstanding bond amount by $32 million, and shorten the final maturity by five years, all while maintaining its current ratings.
"These results point to a very strong credit profile for Baton Rouge and East Baton Rouge Parish," added Mayor Broome. "I want to extend my heartfelt congratulations and thanks to the entire City-Parish finance team for their hard work, as well as our public works leaders and our investment banking partners for their critical contributions."
The City-Parish remains committed to sound fiscal stewardship as it continues to deliver on the promises of the MOVEBR program and other essential projects.