HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/05/2019 - STAFF REPORT: CITY OF FORT COLLINS CREDIT RATINGCredit Rating Summary
March 5, 2019
• 3 Credit Rating Agencies
• Similar but unique rating scales
• Agencies rate organizations
and debt offerings
• Combination of quantitative &
qualitative information used
• Investors rely on ratings to
understand risks
• Higher the rating - less risk &
lower interest cost
Moody’s Standards
& Poor’s
Fitch
Aaa AAA AAA
Aa1 AA+ AA+
Aa2 AA AA
Aa3 AA- AA-
A1 A+ A+
A2 A A
A3 A- A-
Baa1 BBB+ BBB+
etc. etc. etc.
Corporate & Government Ratings
Less
Risk
More
Risk
2
Fort Collins Credit Ratings
City of Fort Collins - Aaa Certificate of Participation – Aa1
• Issuer Rating
• Based on the overall financial and
operational assessment of the
organization
• Applies to a General Obligation bonds
backed by the full faith and credit of the
General Fund
• Specific to this Debt Issuance
• Based on the specifics of the debt
issuance and proposed collateral,
pledged revenue source, and Issuer
Rating
• Note: a COP debt issuance can never
rate equal to or greater than the Issuer
Rating – at least 1 notch below
3
Rating Rational
City of Fort Collins - Aaa Certificate of Participation – Aa1
• City’s sizable and vibrant economy with a
strong institutional presence
• CSU as an economic anchor
• Long trend of healthy financial operations
and reserves
• Benefit of low debt, pension & fixed cost
burdens
• Strong general credit characteristics of
the City per the City Issuer rating
• The essential nature to City operations
of the leased assets in the transaction
4