(PITTSBURGH) June 28, 2013 Mayor Luke Ravenstahl today announced that the City of Pittsburgh's credit rating has been upgraded three levels from BBB stable to A stable. Standard & Poor’s Rating Services (S&P) awarded the upgrade based on improved financial management and planning, reduced debt and growing reserves. The increase brings the City’s credit rating to the highest it’s been in more than a decade.
"In 2006, we inherited a city under financial distress with a low bond rating,” Ravenstahl said. “By focusing on economic development, debt reduction, pension reform, labor peace and prudent fiscal management, we have made great strides in improving Pittsburgh's financial health. Through hard work and dedication, and the contributions of so many, we've become a model city for success in municipal finance."
Citing the City of Pittsburgh’s economic success despite the country’s economic recession, S&P awarded the City’s 10th bond upgrade. For the first time in more than 10 years, all three major rating agencies – Standard and Poor's, Moody's and Fitch – have the City at an “A” rating. The improved rating puts the City in a stronger position to borrow money at favorable terms. The City’s credit rating has improved significantly. It was last rated as junk status by all three agencies in 2003. In 2006, when Mayor Ravenstahl became Mayor, ratings were borderline junk grade.
The City last received a credit rating upgrade in January 2012, after Mayor Ravenstahl and City leaders encouraged international bond rating agencies in New York City to upgrade the City’s rating. As a result of that upgrade, the City saved $1 million in insurance costs and successfully refinanced bonds that resulted in saving $5 million dollars, all of which was put into the pay-as-you-go capital budget.
"The upgrade reflects our assessment of the City's restoration of structurally balanced operations, growth in reserves, reduced debt profile, and actions to address its large long-term liabilities," said Standard & Poor's credit analyst Andrew Teras. "While these trends have progressed over the last several years, we believe that, at this time, the City has demonstrated a proven ability to maintain an enhanced credit profile featuring improved financial management and planning, consistently favorable budget performance, and strong reserves and liquidity."
Under Mayor Ravenstahl’s leadership, the City has made great strides in improving its financial stability and strength. Last year, Act 47 overseers petitioned to remove the City’s financially “distressed” status. The City has maintained a five-year, $125 million, pay-as-you-go capital budget, stabilized the pension fund, and reduced the debt principal by 30 percent, or almost $250 million, to date, with an additional 10 percent, or $90 million, reduction expected by next year.
Office of Mayor Luke Ravenstahl
512 City County Building | 414 Grant Street
Pittsburgh, PA 15219
telephone: 412-255-2626 | facsimile: 412-255-2687