City Receives 12th Consecutive AAA Rating from Standard & Poor’s

For the twelfth consecutive year, Standard and Poor’s (S&P) Global Rating has reaffirmed the City of Portsmouth’s AAA bond rating, which measures the City’s ability to manage its credit. S&P cited its opinion of “Portsmouth's very strong management and economic profile, which it thinks will likely continue to support positive financial operations, resulting in the continued maintenance of high reserves.”

In making the announcement, City Manager Karen Conard said, “The City of Portsmouth has sustained a AAA rating – the highest achievable – since 2013, despite the economic challenges experienced during that time in the US economy at large. The City continues to ‘outperform the sovereignty’ meaning we have managed better than the national economy, in the opinion of Standard & Poor’s. In their estimation, 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. Once again, the S&P AAA bond rating will allow the City to save taxpayers hundreds of thousands of dollars because we can procure 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 “The long-term rating reflects our view of Portsmouth's robust local economy, strong financial-management policies… including its formal capital-improvement planning, financial forecasting, and formal reserve policy … maintenance of surplus operations as conservative revenue estimates outperform budgeted levels, allowing for the continued maintenance of very strong budgetary flexibility and liquidity; and additional debt plans that, as the city works through the total authorization, we expect will not likely have a material effect on Portsmouth's debt profile.” 

Explaining why 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.”