PHOENIX - Moody's Investors Service upgraded Glendale, Ariz., to A2 from A3, citing improvements in the city's "modest" financial position.
Moody's upgraded the city's $107.9 million of general obligation unlimited tax bonds Thursday, and also boosted the city's $240.6 million of senior general excise tax debt, its $197.1 million of subordinate general excise tax debt, its &77.6 million of transportation excise tax debt and $1.9 million of highway user revenue debt, all to A2 from A3.
Moody's also affirmed more than $200 million of the city's water and sewer revenue debt at A1. The outlooks on the city and the water and sewer utility were revised to stable from positive.
"The upgrade to A2 for the GOULT rating reflects continued improvement in the city's still modest financial position benefitting from overall positive economic trends, particularly for excise taxes, as well as prudent budget management," Moody's said. "The city's tax base also continues to grow soundly amid the region's housing recovery. However, the city remains challenged by an outsized debt burden that includes significant leveraging of excise taxes otherwise available for core services."
Moody's had said last year that the Phoenix suburb's credit would likely benefit after it renegotiated an arena lease with the National Hockey League's Arizona Coyotes. The saga of the bond-financed Gila River Arena had been a significant struggle, with the the team's owners filing for bankruptcy and trying to move the team to Canada in 2009. The NHL bought the club and negotiated city subsidies to cover losses, before the city eventually negotiated a much shorter lease to reduce its obligations.
