Kroll Bond Rating Agency ("KBRA") has assigned a long-term rating of A+ with a stable outlook to the City of Waterbury, CT. This rating applies to all of the City's outstanding General Obligation Bonds, including the General Obligation Bonds, Series 2012A and the Taxable General Obligation Refunding Bonds, Series 2012B. Waterbury's direct debt, which includes general obligation debt issued for all purposes, including pension obligation bonds, is $476.4 million, on a pro-forma basis, as of June 26, 2012.
This rating is based on KBRA's U.S. Local General Obligation Rating Methodology. The Bonds will be general obligations of the City and are secured by its full faith and credit pledge. Under state statute, the City has the power to levy ad valorem property taxes on all taxable property in the City, without limitation as to rate or amount, to pay debt service on the Bonds. Proceeds of the Series 2012A Bonds will be used to fund a variety of City capital projects, including school improvements and road projects. Proceeds of the Series 2012B Bonds will be used to refund and defease the City's outstanding General Obligation Tax Revenue Intercept Refunding Bonds 2004 Series B (Special Capital Reserve Fund). Upon defeasance of the 2004 Bonds, no bonds secured by the State Special Capital Reserve Fund will remain outstanding.
The key strengths for this rating include Waterbury's strong financial management policies and procedures, the flexibility to raise property tax revenues and the strong financial position evidenced by maintenance of available fund balance levels of over 5.0% of expenditures in the general fund in five of the last six years.
The stable outlook reflects KBRA's expectation that the City will continue to adhere to its strong financial management policies and procedures, after the expiration of state fiscal oversight statutes. It also reflects the expectation that the City will continue to manage its financial operations to maintain balanced operations and strong reserves, though challenges exist. KBRA will continue to monitor the City's adherence to its financial management policies as well as its financial position.
About Kroll Bond Rating Agency
KBRA was established in 2010 by Jules Kroll to restore trust in credit ratings by creating new standards for assessing risk and by offering accurate, clear and transparent ratings. KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).
Kate Hackett, Managing Director
Thomas Randazzo, Managing Director
Brittni Smith, Analyst