Bond Rating

Independent bond rating agency Standard & Poor’s in 2002 upgraded its rating for the City of Edina’s general obligation bonds.

Standard & Poor’s upgraded Edina’s general obligation (GO) bond rating to AAA, the company’s highest rating. Edina is just the fifth city in the state to receive the rating. Bonds issued by Minneapolis, St. Paul, Rochester, and Bloomington also have Standard & Poor’s AAA rating. There are just 55 cities in the country with the AAA rating. Of those, Edina is just one of 20 with a population less than 50,000.

Moody’s Investors Services, another independent bond-rating agency in 2000 gave the City of Edina its highest rating, AAA. Edina is just one of three Minnesota cities to have the top rating from both agencies. The other cities are Bloomington and Rochester.

Standard & Poor’s emphasizes four factors when assigning the AAA rating to a municipality. The factors are: strong and proactive administrations, effective debt management with moderate to low debt, a vibrant and diverse economy and strong finances.

According to Standard & Poor’s officials, the AAA rating specifically reflects Edina’s “continued above-average financial performance with very high fund balance levels; ongoing growth of the local economy, which has continued to diversify the tax base and attract new development of both retail and commercial property despite the fact that the community is almost completely developed; and ongoing strong management practices.” Additional factors include the City’s participation in the Minneapolis MSA and role as a first-ring suburb in the prosperous western suburbs of the Twin Cities and a manageable debt burden with most GO-backed debt supported by tax-increment financing or other revenue sources. The stable outlook attached to the rating shows Standard & Poor’s expectation of the City’s continued strong financial performance with good fund balances and appropriate management of its debt profile.

The bond rating upgrade helps to ensure that future Edina debt will be issued with the lowest possible interest expense and cost to the taxpayer.