NEW YORK--(City of Birmingham, AL. This rating applies to all of the City’s outstanding General Obligation bonds and warrants, including the General Obligation Series 2013-A and Series 2013-B Bonds. Birmingham’s direct debt, which includes general obligation bonds and warrants issued for all purposes, will be $485.7 million after issuance of these Bonds.)--Kroll Bond Rating Agency (“KBRA”) has assigned a long-term rating of AA with a stable outlook to the
This rating is based on KBRA’s U.S. Local General Obligation Rating Methodology. The Bonds will be general obligations of the City and are secured by its full faith and credit pledge. Proceeds of the Series 2013 Bonds will be used to fund a variety of City capital projects, including landfill expansion, public parks and recreations, road infrastructure purposes, economic development, public buildings and equipment and storm water sewer purposes.
The key strengths for this rating include Birmingham’s strong financial management policies and procedures that are statutorily required by the City’s charter, large unassigned fund balance reserves within the General Fund and additional segregated reserves within the City’s Birmingham Fund and Debt Reserve fund. In addition, the city’s position as the economic driver within the sizable Birmingham-Hoover MSA base that continues to grow and add population and the good liquidity levels are also strengths of the rating.
The stable outlook reflects KBRA’s expectation that the City will continue to adhere to its strong financial management policies and procedures, after the expiration of state fiscal oversight statutes. It also reflects the expectation that the City will continue to manage its financial operations to maintain balanced operations and strong reserves, though challenges exist. KBRA will continue to monitor the City’s adherence to its financial management policies as well as its financial position.
About Kroll Bond Rating Agency
KBRA was established in 2010 by Jules Kroll to restore trust in credit ratings by creating new standards for assessing risk and by offering accurate, clear and transparent ratings. KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).