Fitch Ratings, Inc. has upgraded the City of Gastonia’s bond rating to ‘AA+’ from ‘AA’. It has also assessed the Standalone Credit Profile (SCP) of the City’s water and sewer system at ‘aa+’ – $17.3 million combined utility revenue bonds, series 2015. A press release issued by Fitch Ratings last month, concluded that the City’s Rating Outlook is Stable.
“We are pleased with this rating from Fitch,” City Manager Michael Peoples said. “It further confirms our rate flexibility, our strong financial profile, and low operating cost burden. It also shows investors that we are open and ready for business with a bright future ahead.”
A positive bond rating is important to the City and its residents because it affects future growth and economic development. Although the COVID-19 pandemic has created an uncertain environment for the water and sewer utility sector, the City of Gastonia’s Two River Utilities maintains affordable rates for its customers, with strong customer growth and customer service.
A good bond rating shows investors the stability and quality of the City’s finances, proving its credit worthiness. It also greatly influences interest rates and bond pricing for the future issuance of debt. A good comparison would be a person’s credit score. The higher the score, the less risk a creditor will determine a person is for repayment and the better terms a person can receive for any loans. It proves a person’s credit worthiness. In essence, a bond rating is like a credit score for a local government.