Politics & Government
Watertown Given Highest Bond Rating from Standard & Poor's
Watertown's improved bond rating will save the town money when borrowing.
The Town of Watertown's bond rating improved to the highest given by Standard & Poor's Rating Services, which will lead to savings when the town borrows money.
The town had a AA+ rating, and last week the town received word that the rating will move up to AAA, said Town Manager Michael Driscoll.
The new rating has already saved the town money, Driscoll told the Town Council Tuesday night. The day after receiving the new rating, the town issued $6 million in 20-year bonds to pay for energy efficiency improvements in town and school buildings, and Watertown received a 2.796 percent interest rate.
The town saved $77,000 by having the AAA rating, financial advisors told Watertown Treasurer/Collector Phyllis Marshall.
According to the letter to town officials from Standard & Poor's, the new rating was based on six factors:
- Very strong economy
- Very strong budgetary flexibility
- Strong budgetary performance
- Very strong liquidity
- Strong management conditions
- Very strong debt and contingent liability position, driven mostly by the town’s low net direct debt, and plans to address its unfunded pension and other post-employment benefits (OPEB) liabilities.
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Driscoll said the new rating will save more money in coming years.
"We are at a time of record low interest rates, but as interest rates rise, the interest difference will increase," Driscoll said.
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