Top grade: Fairfield's bond sale wins AAA rating
The town's strong financial standing won another endorsement Tuesday when Standard & Poor's Ratings Services assigned a AAA rating to Fairfield's recent general obligation bond issue, the top grade issued by credit-rating agencies.
The town's fiscal status has been ranked at AAA status for years.
The service also affirmed the town's long-term AAA fiscal rating and a "stable outlook" for that status, according to First Selectman Michael Tetreau. The agency also ranked Fairfield's management as "very strong."
The town refinanced $10.9 million in bonds originally issued in 2001, reducing the average coupon note on the debt from about 4.418 percent to 0.908 percent, saving about $760,000 in interest payments, according to officials.
"This rating reflects a strong budgetary flexibility with 2012 audited reserves at 6.1 percent of adjusted general fund expenditures; adequate budgetary performance, which takes into account a revenue stream S&P considers stable; a very strong liquidity providing very strong cash levels to cover both debt service and expenditures; a very strong management with good financial policies and a consistent ability to maintain balances budgets; and a very strong debt and contingent liability profile, aided by rapid amortization," the ratings report states.
"S&P's affirmation of our AAA rating and stable outlook is a strong reflection on the sound financial management and practices our Town has put in place to keep Fairfield financially strong and well managed," Tetreau said in a news release on the credit rating. "I am also very pleased that S&P rated the town's management evaluation as `very strong.' This achievement is the result of a great deal of effort by the Board of Selectmen and Board of Finance and the town's Finance Department."
Matthew Spoerndle from Phoenix Advisors, the town's financial consultant, said, "S&P continues to recognize the town's strong and prudent fiscal management, solid tax base and active economic development. As a result, the town was able to issue at a very low rate and maximize debt service savings."