National bond rating agencies Fitch Ratings and Moody’s Investors Services have both affirmed favorable ratings of City of Gastonia water and sewer revenue bonds in the agencies’ latest reviews. They issued similar ratings: Fitch affirmed its “AA” (double A) rating and Moody’s issued an Aa2 (double A2) rating. Ratings by these agencies are generally considered an indication of a city’s financial stability and overall financial health. The Fitch review added, “The rating outlook is Stable,” the agency’s forecast that it expects the City to maintain a favorable rating for the next 18-24 months until the agency’s next review.
Both Fitch and Moody’s mentioned the City of Gastonia’s “strong” or “extremely strong” financial position. Moody’s review stated, “The financial position of Gastonia Water & Sewer is extremely strong,” citing its “very strong” credit position.
The Fitch report stated its assessment was based on the City of Gastonia’s “solid financial performance” including its “strong operating profile,” “low debt profile” and “solid financial forecast.” It added, “Financial results are projected to stay strong over the forecast period.” The report cited a number of favorable financial and economic conditions that support its findings:
- “The system’s debt burden falls well below Fitch’s ‘AA’ medians and should remain favorable…”
- “The city continues to experience notable employment growth and economic diversification.”
- “The system has ample water and sewer treatment capacity and appears well positioned to accommodate substantial growth occurring in the southeastern portion of the service area.”
- “The Gastonia, NC water and sewer system’s ability to maintain solid financial and leverage metrics while meeting infrastructure renewal and growth demands…”
Fitch’s report also mentioned that the City’s current water treatment plant renovations can help the City maintain its positive ratings in the future. “Fitch anticipates that the completion of the water treatment plant rehabilitation and continued R&R (renewal & replacement) work could potentially reverse a five-year trend of increased age of plant… well above Fitch’s ‘AA’ median of 15 years.”
“Of course, we’re very pleased with both reviews,” said John Bridgeman. “They are a confirmation that all of the hard work we’re doing to be responsible stewards of the taxpayers’ and ratepayers’ investment in our City continues to pay off.”
