D.C. gets AAA rating for income tax-backed bonds
D.C. is poised to save up to $28 million in interest payments over the next four years after getting an AAA rating for new income tax-backed bonds, according to D.C. Chief Financial Officer Natwar Gandhi.
To fund capital projects and infrastructure improvements, the city typically sells general obligation bonds backed by the city’s full credit. It sold $576 million in general obligation bonds last May, receiving grades of A1 from Moody’s Investors Service, A+ from Fitch Ratings and A+ from Standard and Poor’s. Most states get higher ratings for their general obligation bonds.
Gandhi said in June that he believed bonds backed strictly by the city’s individual and corporate income taxes would receive a higher rating and, after the D auto loan.C. Council passed legislation approving the move, he announced March 2 that he had gotten his wish, when Standard and Poor’s gave the bonds a AAA rating, its highest.
“This is a testament to the sound financial policies that we have been following for the past 10 years,” Gandhi said in a release. “It is notable that even in these difficult financial times, the District has achieved this outstanding recognition.”
Mayor Adrian Fenty, D.C. Council Chairman Vincent Gray, D-at large, and D.C. Councilmember Jack Evans, D-Ward 2, praised the announcement.