Also Assigns a Stable Outlook for the City after Emerging from Bankruptcy
Follows Moody's Upgrade Last Month
Providence, RI - Governor Lincoln D. Chafee today announced that Standard and Poor's Rating Services has upgraded the long-term bond credit rating of the City of Central Falls to BB with a stable outlook. This is a marked improvement from the previous rating of C with a developing outlook and brings the City much closer to investment grade.
According to the Standard & Poor's Rating Services report, "The upgrade reflects active state oversight of the city's financial operations and an approved six-year operating plan that maintains structural balance after the city emerged from Chapter 9 bankruptcy without defaulting on its long-term General Obligation debt."
"The difficult decisions that have been made and the hard work of everyone involved are paying off, as we are now seeing with positive indications such as the Moody's upgrade last month and this S&P upgrade," Governor Chafee said today. "There is a brighter future ahead for Central Falls."
According to the Governor and City officials, staffing and city service reductions along with changes to the City's pension benefits and tax increases were necessary for the long-term financial health of the City. Balancing the budget quickly and implementing the six-year financial plan along with the successful emergence from bankruptcy were the key drivers in Standard and Poor's Rating Services upgrade.
Standard and Poor's Rating Services cites factors that strengthen the rating to include:
• Active state oversight of the city's financial operations,
• An approved six-year operating plan that maintains structural balance; and
• The requirement of the city's management to file quarterly and annual attestations; and
• A manageable debt burden.
Director of Revenue Rosemary Booth Gallogly said that the upgrade and positive outlook bodes well not just for Central Falls but for the State and all RI municipalities. She added, "We are pleased that Standard and Poor's Rating Services has recognized the efforts of the State and the City in developing a stable fiscal framework for Central Falls. Over the next few months, the State and the City will work together on the transition to local control of city government. The implementation of the six-year financial plan and the balancing of the budget was critical to this rating change as was the successful emergence from bankruptcy."