City of Portsmouth Receives 11th Consecutive AAA Rating from Standard & Poor’s, Conducts Bond Sales

The City of Portsmouth has received its eleventh consecutive affirmation from Standard and Poor's (S&P) Global Rating of the City’s AAA rating which measures the City’s ability to manage its credit. S&P cited its “very strong management with strong financial policies and practices.”

Due to its outstanding bond ratings, the City continues to experience low interest rates when financing City capital projects. Finance Director Judie Belanger announced that the City received sixteen competitive bids from bond underwriters on Wednesday, June 7, 2023, for a $22.77 million general obligation bond. Proceeds from the bond issuance will be used to finance Citywide street and sidewalk improvements, school facility upgrades and improvements, fuel station upgrade, Police facility feasibility and design, Police Station upgrades, the Greenland Road Recreation Facility, Hanover Parking Facility upgrades, sewer line replacements, and sewer service and main for Sagamore Avenue Area sewer extension.

Janney Montgomery Scott, LLC was the winning bidder on the bonds with a true interest cost rate of 3.44 percent. “We are very pleased with this rate in today’s market. In addition to the excellent bond rate, the City received a bond premium of $2.1 million which reduces the principle the City will pay,” Belanger said.

At the same time, the City issued an $8.28 million bond anticipation note. The winning bidder was Jefferies, LLC with a net interest cost of 3.55 percent and a note premium of $77,454. “This short-term note funds a portion of the purchase price of Community Campus,” Belanger announced.

In making the announcement, City Manager Karen Conard said, “With a AAA rating since 2013, Portsmouth continues to hold a strong reputation for investment by those who subscribe to the bonds by which the City funds its major capital improvements. We know that Standard & Poor’s affirmation of our financial strength and the local economy will ultimately save taxpayers hundreds of thousands of dollars by procuring the lowest allowable interest rate. This will also enable us to move forward with the capital investments our residents expect.”

In awarding the AAA rating, Standard & Poor’s commented that their report “[R]eflects S&P Global Ratings' opinion of the city's very strong management and economic profile, which we believe will continue to support its positive financial operations, resulting in continued maintenance of the city's high reserve levels.”

Additionally, Standard & Poor’s reported, “The rating reflects our view of the city's robust local economy that benefits from the Boston-Cambridge-Newton metropolitan statistical area while capitalizing on tourism and ongoing economic development, strong financial management policies and plans that include formal capital improvement planning, financial forecasting, and a formal reserve policy and very institutional framework score for New Hampshire municipalities, maintenance of surplus operations as conservative revenue estimates outperform budgeted levels, allowing for the continued maintenance of its very strong budgetary flexibility and liquidity, and additional debt plans...”

Commenting that the City’s AAA Bond Rating is higher than that of the nation, Standard & Poor’s analysts said, “We rate the city higher than [the nation] because we believe Portsmouth can maintain better credit characteristics than the nation in a stress scenario based on its predominantly locally-derived revenue base, and our view that pledged revenue supporting debt service on the bonds is at limited risk of negative [national] intervention.