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    Lynchburg's Bond Ratings Reaffirmed

    The City of Lynchburg’s bond ratings have been reaffirmed by all three major rating agencies, (Moody’s: Aa2; Standard and Poor’s: AA+; Fitch: AA+).   Each rating agency noted strong financial management and diversity in the economy.  Ratings were obtained in order to refund the City’s outstanding 2009A and 2009B Build America Bonds for an expected net present value savings in excess of 5% without extending debt maturity.

    All three rating agencies made note of the City’s strong management with strong financial policies and practices.

    For a city, a bond rating is equivalent to a credit rating for an individual and is based on its credit worthiness or ability to meet its financial obligations. According to the credit rating reports, the City’s bond rating was affirmed due to several factors.  In summary, the findings are as follows:

    Stable and Diverse Tax Base – Moody’s Investors Service
    “The Aa2 rating reflects the city’s stable and diverse tax base that is supported by the presence of multiple higher education institutions and a large regional health care facility. The rating also reflects the City’s satisfactory financial position and above average debt burden made manageable by comprehensive policies and self-supporting enterprise debt.”

    Stable Outlook – Standard and Poor’s
    “The stable outlook reflects our view of Lynchburg’s consistent financial performance and stable economy, which is supported by very strong budget flexibility, liquidity, and management.  The growing area economy, which serves as an anchor for the region, lends stability to the rating.”

    Operating Performance – Fitch Ratings
    “The City’s strong financial resilience comes from a combination of its unlimited legal authority to increase property taxes, solid expenditure flexibility, and maintenance of a strong reserve cushion.”

    “The City is pleased that the three bond rating agencies have reaffirmed the fiscal health of the City,” said City Manager, Bonnie Svrcek. “We certainly have our challenges, not unlike any other City, but we also have a long history of fiscal responsibility and management.

    Moody's          Standard and Poor's          Fitch Ratings