A recent evaluation ofCarmel’s refinancing package by Standard & Poor’s anticipates no change fromCarmel’s current AA+ rating.
“It really substantiates that the City ofCarmelis not in any dire financial situation based on independent, impartial and comparative analyses by an international bond rating agency,” said Loren Matthes, principal with H. J. Umbaugh & Associates Certified Public Accountants.
The S&P analyst indicated that there were no concerns about the debt burden. The analyst went on to say that because of the assessed value increases, the debt ratios had not changed significantly despite additional debt.Carmelmaintains a detailed multi-year fiscal plan, which was reviewed by S&P and discussed by Mayor Jim Brainard.
Five key factors that form the foundation of S&P’s sovereign credit analysis:
- Institutional effectiveness and political risks, reflected in the political score
- Economic structure and growth prospects, reflected in the economic score
- External liquidity and international investment position, reflected in the external score
- Fiscal performance and flexibility, as well as debt burden, reflected in the fiscal score
- Monetary flexibility, reflected in the monetary score
“I am very pleased that S&P has reaffirmedCarmel’s fiscal strength,” Brainard said. “S&P is a well-respected financial rating firm that is objective in its analysis and this rating speaks volumes aboutCarmel’s true fiscal condition.”
The rating is preliminary until the final legal documents have been agreed upon and signed by the Carmel City Council.
The AA+ rating is S&P’s second-highest rating. Ratings are meant to provide a reflection of the fiscal climate of a sovereign government and are based on the willingness of an organization or government to service financial obligations to nonofficial (commercial) creditors. It is essentially a credit-rating for an organization.