New Orleans filed financial reports with its three credit rating agencies Friday after S&P Global Ratings placed the city’s AA-minus on CreditWatch with negative implications due to a lack of updated disclosure.
“The city faced significant challenges completing our 2019 CAFR as a result of a menacing cyberattack, a complete overhaul of five different financial systems into one, and managing through the COVID-19 pandemic. Each individual strain on our workforce was significant, but collectively was a perfect storm,” a spokesperson for New Orleans Mayor LaToya Cantrell told The Bond Buyer Friday. “However, we are happy to report that we have submitted our audit with the attached unqualified opinion to our rating agencies today.”
S&P had said Friday it would have likely withdrawn the long-term general obligation and limited property tax debt ratings if the agency hadn’t received the fiscal 2019 audited financial statements within 30 days.
“If the city provides us with a fiscal 2019 audit within 30 days, we will review the information and take rating actions as appropriate within 90 days of the CreditWatch placement,” S&P said.
The city's GO debt outstanding as of Dec. 31, 2020 was $453.285 million, of which $99.215 million was insured either by Assured Guaranty Municipal or Build America Mutual.
“We are confident that increased revenues, robust vaccination efforts, the significant work to better align our revenues and expenses, more significantly streamline our agencies, and properly incorporate our ARP funds will keep the city of New Orleans in strong fiscal health for years to come,” the mayor’s spokesperson said.
New Orleans GOs are rated A2 by Moody's Investors Service and A by Fitch.
Since 2011, New Orleans has sold about $1.3 billion of GO and revenue bonds.
The city has been hit hard by the COVID-19 pandemic. Since it began last year, Orleans Parish has seen 30,896 coronavirus cases as of June 16 and recorded 800 deaths. Currently, the completed vaccination rate for the adult population is 56.7% with 62.4% having received at least one dose.
