The city of Killeen received upgraded and affirmed bond ratings from Fitch Ratings today. The junior liens rating increased to AA from a previous AA- rating. The senior lien rating was affirmed at AA.
Standard & Poor’s Rating Services affirmed Killeen’s AA rating earlier this week.
The ratings apply to current financing of water and sewer fund debt and the upcoming issuance of $29.9 million and refunding of $8.3 million for water and sewer system improvements.
Dan Wegmiller of Specialized Public Finance Inc. explains, “A bond rating impacts the interest rate at which the city borrows money, like a credit score for an individual.” He says the new ratings from both agencies reflect a stable outlook and the strength of the city’s utility, economy, finances and management.
The increased rating allows the city to borrow money at a lower interest rate thus saving taxpayers more than $300,000 dollars over the terms of these bonds.
The city issues bonds for major capital improvement projects to finance costs over time. This allows immediate funding to accomplish projects that have long-term benefits to residents.
Fitch cited the city’s strong financial management of the water and sewer fund and low debt ratio in its determination of ratings.